Signs you're about to be acquired (2020)

At a company I worked at the CEO out of the blue called for an all hands, all offices meeting with a few days notice. Everybody who wasn't in the main office had to connect via video link. This had as far as anyone could remember never happened before. There was no agenda and no hints as to what the meeting was about. Even senior managers knew nothing. So obviously rumours started flying, people get nervous, and everybody started looking over their CVs and contingency plans.

Meeting day comes and the CEO proudly announces that the company is getting a brand new logo...

There are always signs, and they are easy to rationalise in hind-sight.

The danger is that there are signs for lots of things, so jumping to conclusions regarding the reason can be dangerous.

For example, we recently got a contract with a company fanatical about security. They wanted additional special insurances, which in turn wanted additional company-wide security policies.

This affected everyone, even though the potential contract only affected 3 employees. (And there was an NDA regarding the possibility of a deal.) The policy changes (despite being good policy anyway) likely caused some anguish.

So by all means speculate away, staff love a good rumor, and in the absence of information will speculate anything and everything. But I caution against making big life choices based on that speculation.

Have been acquired/acquihired a few times. Universal. Some holding company you've never heard of but probably have spent quality alone time on their primary website. Activision. General Electric. Accenture.

The distractedness of the executives is spot on. But it always seems to be in hindsight that we look back and go "huh, funny..." I am sure we could write an inference bot that monitors the calendars of people in the organization and estimates that an acquisition is imminent.

And the security/bug fixing. "Yeah, that bug has been there for three years, nobody has time to fix it." Well, all of a sudden, we are fixing it. And more besides. And the licensing of software and source code. Getting a full run down of every open source license, and I mean _every_ license, and then going back and checking them again. A sudden drive to document everything.

I've also seen the ugly side of acquisition too. An equity claw back that happened to me many years ago that I am still sore about. Sudden acceleration of equity grants and a "re-interpretation of what 'it' means" or extreme scrutiny of whether you actually qualify for the equity in your contract. I've seen a few good people suddenly not get anything because there was a missing signature on a document even though the person had been at the company three years.

Large amounts of acquisition money does strange things to people.

I had a nearly same experience with you when my company was acquired by Tencent. Most of employees don't know what's going on, but there are some strangers around in the office, actually another separate office. Only HR and finance people deal with those people from acquirer, they reviewed company contracts and some other legal paperworks. I saw there are lots of paper in their dedicated office. We engineers are the last one knows.

My supervisor called me to a meeting room, he let me first sign a non-disclosure agreement, or he can't tell me nothing. I had to sign that paper. Then he told me that the company was acquired, and you have choice to either leave or work for Tencent. If you want work for Tencent, you had to go over their interview and only talented people will get offer.

But actually 95% of my colleagues get offer, including me.

Some of this could be from a funding round too. I had to actually sign my NDA when people were crossing Is and dotting Ts before closing a round. I had had some printer issues around hiring and hadn't signed it, and nobody followed up until someone wanted to be sure everyone was under NDA.

Also, the morning of a big announcement, my boss asked me "can the blog handle heavy load?" and I was like "yeah sure, but nobody reads the blog", "they will, can we make it like a static page or something?" ... So, like ok, whatever, stupid thing to ask for, but it's easy. Got that going, and also we had a meeting added, no agenda. And one of my coworkers was convinced something was going on, he said people had been in the office all weekend.

> A few days before the Twitter deal was announced, the CEO of MoPub summoned a bunch of us to the office on a Sunday. Nothing like that had ever happened before. At the meeting, he told us about the acquisition (this was when I learned!) and explained that he needed us to sign some paperwork about our equity before the agreement could be finalized.

This sounds dodgy as fuck! If this ever happens to you, please don't sign the paperwork without running it past a lawyer. It's definitely not there to grant you more rights.

These all seem accurate and I'd add even moreso than security (which can be prioritized for other reasons) a focus on buttoning up open source licensing / IP ownership is a dead giveaway that a sale is close. Also the hiring and retention thing is probably less about distraction and more about not taking on additional expenses in the middle of due diligence - generally the acquirer will want to have more of a say in staffing strategy.

One sign that wasn't mentioned is the sudden exodus of higher team/product managers. I've seen this happen twice in my career. Suddenly, the individuals who were once fully committed to the company are leaving to "look for greener pastures." Sometimes, they hold meetings with everyone and their behavior is odd – often, these meetings are pointless and a huge waste of everyone's time, much like meeting with an ex.

Some more:

General cost cutting without any other visible reasons. Cut backs on travel, social budgets, contractors, any other expenses that can be trimmed to make the financials look sexier.

Departments like Finance, Legal, Risk/Compliance and HR are overworked and distracted. These people, at least some of them, get involved after the execs but before everyone else. As someone else said this can start with the CFO but it'll spread to whole teams of paralegals and accountants before you are told about it.

Speaking of HR, do they suddenly want everyone to sign contract addendums or "compliance papers" or whatever? Asking you to fill out a "skills inventory"? Everyone got to get background checks?

Sales teams rushing to finish deals (to sexy up financials) and clear their comp (before the new boss brings new rules). I guess this isn't really that different from BAU.

As has been pointed out these things can all have other causes. But all together, all at the same time, without any stated reason....

Unfortunately ICs are often the least plugged in politically and end up the last to know. The compensation is being retained, unlike everyone else above who heard it through the grapevine before you.

The author mentions a bunch of signs, but he misses the most important one in my opinion. There is really one sign that is the telltale sign of all signs with a much higher degree of accuracy than any of the author's mentioned signs. One person is the indicator. It's not the CEO. It is the CFO. Why? When an acquisition is about the happen, the CFO is sent scrambling to ask the founders, accounting, lawyers, and all others involved for many pieces of information about the company's financials. The acquiring company is doing due diligence during this period and needs this information from the company being acquired. The CFO gets put into a mad scurry and a fire is lit under his ass to get everything done on time, accurately. If you see your CFO is more anxious and much busier than usual, asking everyone who has information for information, there is usually something going on.

I've seen this as an exec and an employee. In addition to things others have noted, I've seen:

  - Unusual visitors to the office (or even having visitors at all!) 
  - Sudden shifts in roadmap priorities 
  - Sudden changes in interest or emphasis on reliability

The criteria are pretty ambiguous, though some weak signals may be better than none.

My company is currently being acquired, but the signs were there for over a year:

- A lack of guiding objectives and growth plans (which are vital in this particular industry)

- Major personnel change on the executive team. New exec had lead CIC events at several prior orgs.

- Complete re-organization of the development side of the business, with a focus on cost cutting and separation into separate divisions.

- Entirely new HR dept hired. More red tape and internal scrutiny.

- Increased political power consolidation within legal department, with several odd (politically motivated?) high level promotions there.

- Lack of internal promotion and compensation. Not replacing personnel who left because of this environment.

Any one of these wouldn’t be a red flag by itself, but all combined were a fairly clear indication.

More importantly what should I do if I get acquired? Assuming I am software engineer or engineering manager. Do people usually get fired?

Do you really need a sign? If you are working for a non public company or even if you are working for a public tech company that is not one of the top 10 tech companies, you are always an acquisition target.

And even if you are at a company that realistically won’t be acquired, you should always be prepared to look for a job at a moment’s notice.

I woke up one day and saw the founder tweet - "Adobe."

The article mentions needing to sign some paperwork about equity in passing, but I think being asked to sign new paperwork (a new IP agreement, etc.) is a sign all on its own. Like the focus on security, it is suspicious if it happens without any other motivating reason.

The company I work for was acquired during the height of Covid. We had an all-hands meeting with the entire company with a 1-hour notice on a Monday. I knew something was up and wasn't that surprised.

The new company made sweeping cuts and I for sure thought I was out of a job. Luckily, the IT team on both sides is small and I got to keep my job (3 years now).

It also helped that upper management of the new company made really terrible IT decisions (the director was fired about a year after the acquisition). We were supposed to convert our proprietary systems (that I maintain) to Net suite. The plan was terrible and crashed and burned.

They tried again last year, and we were successful.

A lot of these are also signs of impending layoffs!

What would you even do with the information?

> Moreover, it’s a little awkward to be selling candidates on your cool, fast-moving startup when you know that you’re about to gobbled up by a larger company.

Anecdotally, plenty of companies are still running their hiring pipeline even when someone - including HR - knows that they're about to be acquired, and nearly everyone who doesn't have a signed offer in hand (and sometimes, not even them) is going to be either completely ghosted, or get apologetic letters from a different company's HR department.

In a very small company, they will just frame it as a "collaboration". You will have a meeting with an external party to showcase your projects. But not the other way around.

Contractors get hired.

I’m a general python contractor. So far all of my clients have been acquired or had layoffs within a year of hiring me.

This might be UK specific because of how UK labour laws work.

At the factory where I worked... Surveyors on the grounds.

> Be on the lookout for the signs discussed above, as well as other, unusual activity, which could mean something big is about to happen!

While it can be fun to fantasize about what every little oddity means, I’d recommend against making this a priority in your daily life. If you find yourself that distracted from your work, it’s a good time to dust off your resume anyway, regardless of if M&A forces you to.

Most of the points are only applicable to smaller companies. At larger companies the typical employee is far removed from the actions of executives.

Same signs if you are trying to find out if someone is looking for other work.

Add to list appearance of new law firms or big 4 accounting firms needing data for unspecified reasons.

And changes in the work hours of execs

see also Signs that a Startup is Going Bad https://www.swyx.io/startups-going-bad