A great founding engineer may not be the right person to be CTO of a larger team. Recognizing this misfit can lead to a mutual, amicable departure where the exiting co-founder retains their fully vested equity, preserving the relationship and acknowledging their early contribution.

Serial acquirer Lifco improves post-acquisition performance by having sellers retain an ownership stake in their business. This goes beyond typical earn-outs, keeping the founder's expertise and incentives aligned with the parent company for long-term growth, rather than just hitting short-term targets.

Veteran dealmaker Andy Cohen argues against a "win-at-all-costs" mentality in M&A. True success, particularly in tech deals where talent is key, comes from ensuring the acquired team feels the outcome is fair and their future is promising. If one side feels they lost, the integrated entity will fail.

An earn-out is a tool for alignment, not just a financial hedge. If a target company is on track to miss its earn-out targets, a savvy acquirer will proactively renegotiate the terms. The long-term value of retaining and motivating the key team members outweighs the short-term financial gain of a missed payment.

When an experienced founder starts a new venture based on their own vision, the equity split doesn't need to be 50/50. By framing it as 'my deal,' the primary founder can retain a supermajority (e.g., 80%) while giving a technical co-founder a smaller but still meaningful stake.

A 50/50 equity split should not be the default. The conversation must focus on what unique, "unfair advantages" each founder brings to the table. This could be a significant pre-built audience, a deep professional network, or personal capital. The idea itself is rarely worth any equity.

To justify a high acquisition multiple, a founder must prove the business can operate without them. A powerful tactic is showing an acquirer your calendar to demonstrate that a majority of key clients are managed by the team, not the founder. This de-risks the acquisition and proves the company has true enterprise value.

Granting a full co-founder 50% equity is a massive, often regrettable, early decision. A better model is to bring on a 'partner' with a smaller, vested equity stake (e.g., 10%). This provides accountability and complementary skills without sacrificing majority ownership and control.

Two founders rejected a $20M acquisition offer they felt was too low. After successfully pivoting their business during the pandemic, they returned to the same buyer and received a doubled offer of $40M with better terms. This shows how patience and focusing on business performance can dramatically improve an exit outcome.