Key Takeaways:
- Acquiring a startup requires two playbooks: deal execution and integration.
- Cultural fit and people integration are just as critical as financials.
- A bottom-up joint financial model is essential for setting realistic goals, identifying risks, and aligning both teams around a shared path to value.
- Founders must lead with vision while staying grounded in process.
- You’re buying a company but also selling your culture and future.
At a certain point in your company’s growth, organic momentum may no longer be enough. You might be eyeing another startup that could accelerate your roadmap, expand your customer base, fill a talent gap, or offer a technological advantage. When that moment arrives, acquiring another company can be an incredibly powerful tool—but only if approached with precision and care.
This is not the time to wing it. Acquiring a startup is one of the most complex moves you’ll make as a founder, and the stakes are high. I’ve supported founders through many acquisitions, and I can say with confidence that successful M&A depends on structure, consistency, and clear communication. Let’s walk through what that looks like in practice.
You’re Not Running One Project, You’re Running Two
Too many founders focus only on closing the deal. That’s a mistake. The real work happens in two distinct but equally important phases: deal execution and integration.
Here’s the key: as founder and CEO, your role is not to micromanage deal mechanics. It’s to stay focused on the people, culture, and long-term vision. That means trusting your experts—your CFO, legal counsel, tax advisors, and technical leads—to own the execution side while you lead the integration effort.
The deal execution side involves financial diligence, legal contracts, tax planning, and technology audits. You’ll need experienced, trusted advisors across all of these areas. Step back and let them do their jobs.
At the same time, you need to be deeply invested in integration. This is where many startup acquisitions fall apart. Integration means culture, communication, org design, compensation alignment, and change management. It’s about ensuring the people and systems you just acquired will actually work within your company, not just on day one, but six months and two years down the road.
You need both playbooks running from the start. But your leadership is most valuable where spreadsheets can’t go: in uniting teams, aligning goals, and setting the tone for the shared future.
…your leadership is most valuable where spreadsheets can’t go: in uniting teams, aligning goals, and setting the tone for the shared future.
You’re Buying, But You’re Also Selling
It’s easy to think of yourself as the buyer in an acquisition. After all, you’re writing the check. But remember: the team you’re acquiring is evaluating you just as much as you’re evaluating them. Every conversation is part of the pitch.
You’re selling your vision, your values, and your company as a great place to land. How you show up—your tone, transparency, even how you handle conflict—will shape whether the team on the other side wants to stay on board or start looking elsewhere. This is especially true for founders or key employees who are essential to the value of the company you’re acquiring.
If you come in trying to dominate or dismiss the culture they’ve built, don’t be surprised when the best people walk away after close. On the other hand, if you listen carefully, share your vision honestly, and treat people like partners in the next chapter, you’re far more likely to get buy-in and keep it.
Culture Isn’t a Side Topic—It’s a Critical Risk Factor
Founders love numbers. And numbers matter. But when I look back at deals that failed after close, the most common thread isn’t financial; it’s cultural.
…when I look back at deals that failed after close, the most common thread isn’t financial; it’s cultural.
Culture clash kills deals. Fast.
You need to understand how the other company operates. What motivates their team? How do they communicate? Are they scrappy or process-driven? Hierarchical or flat? Remote-first or in-office? You don’t need total alignment, but you do need to know where the friction points will be and have a plan to address them.
If something feels too “off” culturally, take it seriously. Don’t push forward because the numbers look good. It’s much easier to walk away before close than to try and unwind a bad acquisition six months in.
People Are the Value, Treat Them That Way
Every acquisition has a few key people who make the engine run. Your job is to figure out exactly who they are and what it will take to keep them engaged, motivated, and excited about the future.
This often includes founders, engineering leads, product managers, and salespeople with key customer relationships. Don’t assume they’ll stick around just because the deal closed. You need to understand what drives them. What are they passionate about? What do they want to build next? What would make them feel like this next chapter is a step forward, not just a handover?
Take the time to listen. Ask real questions. Find out what inspires them—and what might cause them to walk. That input should help shape everything from their post-acquisition role to how success is defined and rewarded. If you’re offering earn-outs, retention bonuses, or leadership opportunities, spell out the structure early and tie it to clear, meaningful outcomes that align with their personal goals and motivations.
And when hard changes are necessary, don’t hide from them. If someone won’t have a long-term role post-close, be transparent. Offer a fair transition plan. People will respect your honesty far more than empty promises or vague timelines. Clarity and empathy go a long way in keeping morale strong and preserving the value of the team you just acquired.
Address Compensation, Org Structure, and Expectations Head-On
Compensation is one of the most sensitive and easily overlooked areas in any acquisition. If your teams are paid differently, promoted on different timelines, or operate under different policies, tensions can build fast. Yes, you need to have honest conversations up front, but you also need to approach this with creativity and a strong sense of fairness. Look for ways to align incentives across both teams without erasing what makes each company unique. That might mean adjusting salary bands, creating unified bonus structures, or offering equity refreshes tied to post-acquisition goals. The goal isn’t just consistency—it’s trust. When people see that compensation is being handled transparently and thoughtfully, it builds buy-in and reinforces your commitment to making the combined company stronger than the sum of its parts.
People also need to understand how decisions will be made going forward. Who reports to whom? How will raises and promotions work? What’s the new normal?
Where possible, find quick wins. Let the incoming team influence some aspects of the combined culture—it helps build trust and a sense of shared ownership. But be clear that, over time, your systems and expectations will become the default. This isn’t about control; it’s about creating clarity and consistency for everyone.
Communicate Clearly, Consistently, and with Empathy
Every step of the process should be grounded in a clear, consistent rationale. Why are you doing this deal? What’s the value? What’s the vision? How will it benefit both teams? If circumstances change—say, you need to revise valuation or shift integration plans—tie that change back to the same logic.
Founders often hesitate to share bad news, but transparency builds trust. If handled well, even difficult updates can be understood and accepted.
Remember: people on both sides are dealing with change, and change creates uncertainty. The more consistent and human you are in how you communicate, the smoother the transition will be.
Build a Real Joint Financial Model That Actually Works
Too many founders treat the financials in an acquisition like a simple math problem: your revenue plus their revenue, your burn plus their burn. That’s not a financial model; it’s a merger of spreadsheets. The real value of an acquisition lies in what the combined business can achieve together, and that requires a different level of thinking.
The real value of an acquisition lies in what the combined business can achieve together, and that requires a different level of thinking.
You need to build a bottom-up, joint financial model that reflects not just what both companies have done in the past, but how they will operate as a single entity going forward. This is your financial roadmap for the future and a critical reality check.
While your finance team or fractional CFO should lead the mechanics of this model, your job is to make sure it reflects your strategic vision for how the two companies will function together. This includes aligning on how teams will merge, where resources will be deployed, and how the value of integration will be realized over time.
Start by identifying the business drivers on both sides. How will the combined team go to market? What will sales cycles look like? Are there operational synergies—like shared tooling, headcount consolidation, or marketing leverage—that will actually materialize, and when? Be honest about integration costs, expected churn, and the ramp-up time for new processes or product combinations. Every assumption should be grounded in logic, not wishful thinking.
Model different scenarios. What if you lose a key developer or founder post-close? What if customer retention dips during the transition? What if integration takes twice as long as expected? Stress-testing the model helps surface potential blind spots and prepares you to make better decisions under pressure.
A strong joint model also gives you leverage. If the business case weakens during diligence—maybe projected growth turns out to be inflated or critical hires plan to exit—you can return to the model and revisit valuation, earn-outs, or other terms with a clear rationale.
Nail the Deal Structure or Pay for It Later
Amid all the excitement, it’s easy to view deal structure as just paperwork, but it’s actually one of the most powerful financial levers in any acquisition. How you structure the transaction will determine how it’s taxed, what liabilities you inherit, how proceeds are distributed, and whether you’re setting yourself up for a smooth integration or a costly mess.
Far too many founders overlook tax structuring until the final stages, only to run into avoidable, expensive complications.
The way you structure the deal—stock vs. asset purchase, cash vs. equity, domestic vs. international—can have a major impact on both value and risk. Don’t assume the default structure is the right one. Run multiple scenarios. Model the tax impact for all parties. Structure the deal intentionally, not reactively. And if the company you’re acquiring has international operations, be especially cautious, as equity plans and payroll compliance can quickly become extremely complex.
The way you structure the deal—stock vs. asset purchase, cash vs. equity, domestic vs. international—can have a major impact on both value and risk.
Above all, bring your tax and legal advisors to the table early. Smart structuring preserves value, mitigates risk, and sets the foundation for a clean, compliant transition.
Lead With Vision. Execute With Precision.
Startup M&A is not a spreadsheet exercise. It’s a strategic, deeply human process that can unlock incredible value—or destroy it. With the right structure, the right people around you, and a commitment to clarity and empathy, you can do it right.
Your job isn’t to master every detail of due diligence. It’s to lead people through change. Focus on cultural fit, team integration, and a shared vision of the future. Let your experts do what they do best, so you can focus on what only you can do.
So, if you’re preparing to acquire another startup, don’t improvise. Surround yourself with experts. Plan for both execution and integration. Stay realistic, honest, and grounded. And remember, you’re not just buying a company. You’re inviting new people into your vision for the future.
Do it thoughtfully, and everyone walks away a winner.
Thinking about an acquisition?
Burkland’s fractional CFOs have supported dozens of startup M&A deals. Let’s help you structure, execute, and integrate with confidence. Contact us to request more information.