Selling your company is not selling your house; you still have to live there.
principle — attributed to Joanna Stone Herman
Stone Herman's reframe of the standard analogy is precise. People use the house-sale analogy for selling a company. Yes and no. Selling a company is often like selling your house and having to live there afterwards with the new owner. The sellers do not leave the building. They continue to run the business under new ownership. The implication for dealmakers is operational. The deal is not a transaction that ends at signing. It is the start of a working relationship that has to function for years. Bankers who optimize for the closing terms and ignore the post-deal reality produce deals that look good on paper and break down within eighteen months. The discipline is to evaluate the whole relationship, not just the transaction.
For investment bankers, M&A advisors, and founders considering a sale. The principle is most useful as a corrective when the seller is being advised to maximize price without weighing the post-sale working relationship.
ma-analogies, post-sale-reality, house-analogy, ongoing-relationship