Latest / The Startup Exit Podcast with Fexingo: IPOs, Acquisitions, and Founder Liquidity Events / How Founders Use Liquidity Event Etiquette to Maximize Net Proceeds
Transcript
- Lucas: So there's this narrative floating around that when you sell your company, the only thing that matters is the headline number — the total deal value. And I think that's dangerously incomplete. Luna: Dangerously? That's a strong word. But I think I know where you're going. The net number after taxes, fees, clawbacks — that's what actually hits your bank account. Lucas: Right, but even that's only part of it. There's a softer factor I've seen swing outcomes by millions of dollars in either direction, and it rarely gets discussed on stage. It's what I'd call liquidity event etiquette — how you treat people in the final months before a deal closes. Luna: Okay, I'm listening. Give me a concrete example. Lucas: Let me tell you about a founder I know — name off the record — who sold his B2B SaaS company for two point one billion dollars earlier this year. The week the letter of intent was signed, he made a phone call to an early employee who'd been laid off three years prior. He told her she'd still get her option payout based on the acquisition price. Luna: Wait — she was laid off, and he still paid her out? That's not standard. Lucas: Not standard at all. Most employment agreements have a termination clause that extinguishes unvested options. Legally, he owed her nothing. But he knew that employee had been critical in the early days, and he wanted the team — current and former — to feel taken care of. Luna: What did that cost him? Lucas: About eight hundred thousand dollars. Which sounds like a lot until you consider the alternative: the remaining team saw that gesture. Morale stayed high. Key engineers who had offers from competitors decided to stay through the earnout period. The acquirer noticed the cultural cohesion and didn't push as hard on the escrow amount. Luna: So goodwill literally saved him money on the deal terms. Lucas: Exactly. The escrow got negotiated down from fifteen percent to ten percent. On a two-point-one-billion deal, that's over a hundred million dollars that stayed liquid. Now, I'm not saying the phone call alone caused that — but it set a tone that made the acquirer trust the founder's representations. Luna: That's wild. So etiquette isn't just nice to have; it's a negotiation lever. Lucas: Precisely. And it cuts both ways. I've seen founders who got greedy in the final stretch — accelerated their own vesting but didn't extend the same courtesy to their CTO; tried to claw back retention bonuses from mid-level managers. The acquirer got spooked. They demanded deeper diligence, longer holdbacks, and in one case, the deal fell apart completely. Luna: Which makes you wonder: how many exits die because of bad behavior, not bad business? Lucas: We don't have great data on that because postmortems tend to blame valuation gaps or market conditions. But look at the current environment. We're recording on June 16, 2026. The ARK Innovation ETF is up over nine percent in the last five days. Coinbase is up eleven percent. There's a lot of liquidity sloshing around. Deals are happening. But when things get frothy, acquirers get more cautious about cultural integration. Luna: Because they're paying a premium and they want to make sure the team stays intact. Lucas: Right. And Rivian just announced layoffs after R2 deliveries started. That's the opposite signal — they're cutting hundreds of workers right after a product launch. If you're a founder in a similar position, you want to be the company that retains talent, not sheds it. Luna: So what are the practical do's and don'ts? Let's say I'm a founder about to sign a term sheet. What's the first move I should make? Lucas: First: call your earliest employees — the ones who took a below-market salary. Even if they've left. Even if you're not legally obligated. Tell them you'll honor a pro-rata portion of their option value. The cost is usually small relative to the deal, and the signal is enormous. Luna: Second? Lucas: Second: accelerate vesting for key hires whose options won't fully vest before close. If your VP of Engineering has twelve months of vesting left, accelerate it. They'll stay through the transition, and the acquirer will see that as a commitment to continuity. Luna: And third? Lucas: Third: be transparent about the timeline. Don't let rumors fester. Tell your team, 'We're in exclusive negotiations. I can't share the price yet, but I will as soon as I can.' Uncertainty breeds anxiety, and anxious employees jump ship — or worse, leak to the press. Luna: That's a good set. And it's refreshing to hear that being a decent human being actually pays off. Lucas: It does. And on that note — a quick aside. These conversations are only possible because listeners like you support the show. If you've gotten something out of our episodes, a couple of dollars a month genuinely makes a difference. It keeps the podcast ad-free and independent. You can chip in at buy me a coffee dot com slash fexingo. Luna: Yeah, it's a small way to say these episodes matter. We don't run ads, so listener support is what keeps us going. Lucas: Exactly. And now back to exits: there's one more etiquette rule that often gets overlooked. At the closing party — and there should be a closing party — don't just toast with the acquirer's executives. Find the assistants, the paralegals, the junior bankers who pulled all-nighters. Thank them by name. It sounds trivial, but those are the people who will remember you when you want to do your next deal. Luna: So the exit isn't just a financial event — it's a relationship event. Lucas: Exactly. And the relationships you build during the exit are often more valuable than the cash itself, because they determine whether you'll be welcomed back into the ecosystem. Treat people well, and your next thing will be easier to fund, easier to hire for, and easier to sell. Luna: I think that's a great note to end on. Lucas, thanks for breaking this down. Lucas: Always a pleasure, Luna. See you next time.