How realistic are the M&A scenes in Succession?

I'm afraid I have to inform you, you are all dismissed. Yeah, you're all fired. So if you can leave your laptops where they are and hand in your passes, security will be coming around.

Now, I think this is actually as surprising as it might feel accurate.

Today we're going to watch some scenes from Succession about one of the common things that happens in startups, which is M and A. A larger company is buying your smaller company. We're about to find out exactly what happens and what I think about it. Let's get right to it.

Hey, hey, hey, buddy. Good to see you. So we ready to up?

Yeah. Okay, look, I'm really sorry, but it looks like there's an issue.

Come on, I came all the way up here, dude.

Yeah, I'm sorry.

Dude.

Okay.

When you're going through M and A as a startup, this is how it goes down. It's almost exactly like this. Usually you have very few people on the call on your end and they've got way more people on the call on their end. They don't always know what the meeting's about. So I can see the agitation there on their acquirer being like, oh, hey, dude, I came all the way out. And he didn't mention, oh, look, I brought all my bros. And he's got this founder who seems nervous because he's about to deliver bad news. And he straight up goes, yeah, we have a problem. Here's the funny thing, everyone's job in the room is to solve that damn problem. The more direct you are about that right away, the more likely it is that the deal actually happens. So this is the right way to do it. That doesn't mean everyone does it that way. That doesn't mean people know that this is how it works. But in reality, when you've spent enough time with startups and talk to folks and founders and even acquirers about M and A, this is actually pretty common.

You know I love what you do, right? And I'd love to keep you and your team in place. Lawrence, I think Valter is the shiz.

We're the shiz.

Yeah.

What's it gonna take? You want me to. Let me just send a vintage Jaguar over to your house today, I'll do it.

That's not how it goes down in terms of the offer he made of what he would do, because obviously it sounds like he hasn't even heard what the problem really is yet. What they would say is, hey, I love you, love your company, want to keep it together. What do you need from Me. And they usually wouldn't give an example of sending something ridiculous over. So that's the movie part. But in terms of accuracy, of, like, the vibe and how it does go down when the acquirer wants to buy you is easily another 9 out of 10 team.

I just think, bottom line, I can deliver a lot more value for our shareholders. I hope we haven't inconvenienced you. We appreciate your interest in our little outfit, but I think that's it. You get the message.

What?

I'm not letting you Neanderthals into my company.

Ever.

A bunch of bloated dinosaurs who didn't even notice a monkey swinging by till yesterday. Well, fuck you, daddy's boy.

You never know if you might sell to these people right now, later, are they gonna come back with a better offer? Like, you never know. So it's not likely you're going to say anything this egregious and make them feel like you hate them. And whether you want to sell or not, these are conversations that teach you a lot, teach you about their business, teach you about their perspective on your business, as much as you can get out of them. So these are the kinds of things that founders wish they could say, but they would never say. So I give this scene a 1 out of 10 in terms of accuracy.

Deal.

It's all very exciting. I can't wait to see you got a deal. Yeah.

Serious?

Yes, dude. Listen, I think. I think you've made a really great decision, and I hope there's no hard feelings over all the shit talking.

No, no, no, it's cool. It's cool.

This version of the conversation, 10 out of 10, it's very common for it to happen because everyone's just came to the conclusion that this is happening now and we can let go of our guard, we can let go of our sort of negotiation sort of stance. So, for example, when you're doing M and A and you're having these conversations, it's much more conducive to a relationship when you think of it as a negotiation and you make it clear that, hey, this is not personal. And when both sides start saying that, that's actually a positive sign during the negotiation process. What happens next after that shit talking is hilarious. Let's go check it out.

I've spent the last 36 hours on a deep dive into the drivers of the business. Headline is, it's a body pit. They have a massive data with no analytics. There's no way of telling what's a hand and what's afoot. But it's still a killer business. The platform, the brand's ethos and culture are leading edge. And in my view, it's fixable.

It's funny how these ups always make the bottom line look fatter.

All they need is adults in the room. Accounting, analytics team, and investment. We burn 50 million for a few years.

We.

We make it the best thing in the world.

Oh, is that all? Sometimes there's all kinds of considerations that come up post acquisition that are very similar to these kind of discussions because you find something out you didn't know, or your company has a strategy shift, and then all of a sudden you're thinking differently. All that being said, the best environments to sell your company into are ones where none of this type of stuff happens. And there's a lot of clarity on the strategic fit, but that's still very rare.

You know, it's interesting, dad, because I hear everything he's saying, and it actually. It almost sounds like a good pitch. But I call bullshit. I spent some time down there, and I'm just not seeing it. I don't know exactly what they're doing, but they're fakes. Beehives, almond milk. And take another week on that report, Matilda. It smells wrong, and they're hiding shit. Speaking of hiding shit, I took a couple of their staffers out, I got them shitfaced, and apparently they're looking to unionize.

This is really a fascinating contrast to the previous scene, but the accuracy of this is like a 8 out of 10. Here's why. You're gonna have multiple stakeholders at the acquirer that care a lot about the deal, and they're gonna have different opinions. They're going to sit there and debate what to do with this business, how to fund it, how to not fund it, try to find the dirt about the business, just like he suggested. Took some employees out, learned about unionizing and things like that, which you know, in this light, from a business standpoint, is probably not what they want. There's legitimate reasons why this acquisition might not get integrated successfully. Based on hearing both parties, we just shutter the. Close it.

That's chunky.

Come on.

I mean, he doesn't know what he's talking about. Fine. So we restructure them and we grow.

I think if we don't shutter it, then we got it. We carve that shit like a pumpkin, huh? You hive off the profit center, you keep the domain name, the archive.

Gut level, dad. This thing is not coming back.

Kendall, you think you can gut Walter for me? It is very typical for Companies to buy smaller companies and shut them down or reveal their plans to the founders after the founders have been acquired and the company's been acquired. This is not uncommon. In fact, the most frustrating thing when you get acquired is that the picture that was painted during the acquisition process is not the same picture that you see once you get into the company. Very rarely does a company get acquired and everything just work out the way everyone thought it would. There's always going to be things that you're just like, oh, I wish I knew that before we sold, or I can't believe it's like this. And that can happen for a million different reasons, because in order to let the deal happen, you're on both sides ignoring so many things. You also tend to have a fairly short timeline. And even if you've done a ton of diligence, there's always more things that you might not know or understand. And the diligence involves all the time, the founders and the company bringing that data to the acquirer. So a lot of things can be reframed, a story can be told, revisionist history for what happened in the past and what's going on now, all that can happen. And I'm not putting blame on anyone. This is all just the types of things that go on to get a deal done. So now Kendall is being tasked with gutting the company after all the promises that he made to the founder.

Everybody, if I can just have a second, I just wanted to update you on a couple of developments.

Some of you may have noticed. Servers are down, and I'm afraid I have to inform you, you are all dismissed. Yeah, you're all fired. So if you can leave your laptops where they are and hand in your passes, security will be coming around.

Now, this is a very dramatic version of what happened, but the accuracy, I give it like a 7 out of 10. The reason for that is it's not uncommon to have to go shut down a company, fire a certain amount of people or things like that, either pre or post acquisition. The good news here for the founders is that they already sold the company. Hopefully they made some money. Hopefully these employees made some money, too, and then the company's deciding to let them go. A lot of times this happens before the acquisition happens and when it happens before, the founders are doing the job of letting go some percentage of the company. Company because of the acquisition.

Been through everything you've shown me, food and weed, those are the only two verticals driving revenue. So we're folding them in. And, yeah, you're all free to leave. This is a joke. You have 15 minutes to gather your belongings and exit the building. Separation agreements will be handed around shortly. One week of severance per year served with full non disclosure. Post your little videos. You get three days.

Unused. Vacation days will not be reimbursed. Health benefits will be terminated at the end of the month. That's it. I'd like to thank you all for your hard work.

That's kind of the stuff you have to share with the team. You usually do that as part of the kind of narrative and process almost exactly like it was done here where you first tell them this is what's going to happen, what you're going to get and what's going to happen to you. This is actually as surprising as it might feel accurate. Now the part of the emotion being like devoid here and sort of stating these things matter of fact, pretty much ignoring anything anyone's saying. There's people that operate like that, there's people that can do that. But most folks who are laying off people don't usually do it with this level of lack of emotion. And I think that's the one of the most interesting things about this because usually there is a decent amount of emotion involved. All these people are gonna lose their jobs.