Founder Exits: To Sell or Not to Sell

Auckland’s first TINShed event for 2018 was held at Generator’s trendy executive lounge on the top floor of Excelsior House, Britomart.

The stellar panel of TIN company CEOs spoke candidly about the factors influencing their eventual decisions to exit, through the sale of their companies. The dynamic challenges faced by founders and CEOs at different phases of a business’ growth was a key theme of the event.

Panelist Roy Moody (vWork CEO and former CEO at Phitek Systems) stated, “I’m a strong believer that there are CEOs for certain times or phases of a company.”

“I’m a strong believer that there are CEOs for certain times or phases of a company.”Roy Moody, vWork CEO and former CEO at Phitek Systems

He said, for example, that a CEO may be strong at M&A but not be an operational person, asserting that “if you don’t play to your strengths then you need to move on.”

Panelist Mike Carden (Joyous CEO and former founder/CEO of Sonar6) added that “a tech founder may not necessarily be good at managing teams. The natural assumption is that the founder of a tech company will end up leading his team, but that may not be the best fit.” He maintains that a founder must keep asking themselves whether they are the most suitable person to be running the business at each point in the company’s growth curve.

Many factors can eventually lead to the decision to sell. In the recent sale of BBC Technologies to TOMRA for $67m, CEO panelist Geoff Furniss stated that the primary driver was changing shareholders within the family-owned firm. ‘We were in a good financial position and had no pressing need to exit, and it’s been a long ride. But we’ve succeeded in making everyone happy,’ he said.

An alternate exit route for some founder/CEOs is to step away from the CEO role to take on another role within the firm that they founded – recent examples of this include Rod Drury (Xero) and Murray Holdaway (Vista Group). In a robust group discussion, event participants shared various strategies that can be employed to structure a company’s C-suite as part of succession planning. Managing executive “burn-out syndrome” was discussed at length, and ideas were shared on how and when to make tough HR decisions to ensure continued company growth.

Thank you to everyone who attended this event. Watch out for the next TINTalk event at TechWeek on Thursday, 24 May – more information to follow shortly!