Last November, the reviews management platform GatherUp was sold to SaaS holding company ASG for an undisclosed sum. When these events happen, we read about them, debate whether they make strategic sense, and so on. But rarely is there a deep dive into the process that went into the transaction. Did the owners agonize over the decision to sell? Was the deal all about money? Or did the owners fight to preserve their brand, their team, and their culture? How long did it take? And how painful was the process?
GatherUp CEO Aaron Weiche told us the first contact with ASG happened well over a year before the deal. After a period of ocassional check-in calls, things progressed in July 2019, when ASG indicated on one of those calls that it wanted to make an offer. After a very intense four-month process of negotiations and due diligence, the deal was announced in November. Aaron said he couldn’t imagine how the process could have happened any faster.
Offering a Deep Dive
Aaron offers that rare deep dive in a remarkable three-part (part 3 is pending) The SaaS Venture podcast recorded with Aaron’s co-host, Whitespark CEO Darren Shaw. Localogy recently recorded a conversation with Aaron to get essentially a condensed version of the podcast. Aaron will also appear on this panel on Day 3 of the upcoming Localogy 20/20 event in San Antonio.
11:00 – 11:20
What’s the Roadmap for After the Exit Event?
So the exit happened. The start-up you built with lots of blood, sweat and tears is now part of a larger organization. You’ve gone from being anxious about making payroll, to wondering how your team will mesh with the other company operators. Now a new journey begins as you seek to find common ground with other business leaders. You start to strategize on how one plus one equals three or four or even five. In this session, we’ll hear from those who are in the midst of roll-ups – what works, where the traps and landmines are located and how orchestrating unique business cultures for harmony is more art than science.
The following are some highlights from our chat with Aaron.
On What Should Founders Ask Themselves Before Selling
We asked Aaron what set of questions do founders need to have solid answers to before they make a decision to sell. Is it all about money? Is it all about the terms? Do you need to keep some control? What about the team, brand, product, strategic direction? Is it important that these things be preserved under a new owner?
GatherUp’s leaders had their own three-part test to gauge whether the deal was worth doing. Would the deal help them grow faster? Would the deal benefit the entire team? And would the deal allow them to continue on their vision?
He says it is vital to know what’s important to you as you enter the deal. Otherwise, you risk discovering what really matters to you when it’s too late to do anything about it.
“When you get an offer, emotions take over really fast,” Aaron said. “If you don’t have some thoughts and a framework, you will be at the whim of your emotions.”
On Breaking the News to the Team
GatherUp’s leaders waited until the deal was about to close before alerting the team. Aaron said this was necessary to avoid massive distraction among the ranks, key defections, and so on. Once the news was delivered, Aaron and original founder Mike Blumenthal conducted private meetings with everyone on the team to hear their concerns and convince them it was a good move not just for the owners but for everyone.
Aaron acknowledged this wouldn’t have been possible if the leadership didn’t have a deep existing well of trust with the team.
On the Transition Process — Expectations vs. Reality
Aaron acknowledges that transitions are fraught with challenges. Change is inevitable and much can go wrong when you bring together new people, merge cultures and navigate around very human emotions like fear and anxiety.
Two things help GatherUp transition into the ASG family. One was getting an early start on transition planning, which Aaron began more than a month before the deal closed.
The other was something ASG brought to the table. An “Integration Day” where everyone gathered from both teams, went through exercises to get acquainted and offered a safe space to express their fears and anxieties.
“That went really well,” Aaron said. “After that, you just have to feel your way.”
On Staying on After the Deal
Aaron made the decision to stay on as GatherUp’s CEO after the deal closed and he remains at his post today. He said the decision had a lot to do with wanting to see his plans through with his team. And it was important to get ASG’s assurances that they would support his plans.
“I want to see this into the next phase,” Aaron said. “I can’t say this is a forever thing, but I am engaged and excited. And I love what 2020 holds for us.”