Latest / The Acquisition Talk with Fexingo: Mergers, Buyouts, and Business Sales for Operators
The Management Retention Trap That Cost a Buyer $50 Million
In 2024, a private equity firm acquired a fast-growing SaaS company for $300 million. The founder and CEO was critical to client relationships and product vision. The buyer included a generous retention package with a $2 million signing bonus and a guaranteed three-year earnout that paid out regardless of performance. But the CEO left after 18 months, collecting the remaining earnout as a 'good leaver'. A weak non-compete allowed him to consult for a competitor, and the buyer lost its largest client. The acquisition's value dropped by $50 million. This episode dissects the…
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