The Funnel, Ep. 15: What Happens To Your People?
As you reach the very bottom of the funnel, the questions stop being technical and start becoming personal.
Price, structure, taxes, and terms all matter, but for many founders, the most emotionally charged question is what happens to the people who helped build the business. This episode addresses that question directly and explains what founders can control, what they can’t, and how to handle this part of the process without creating unnecessary risk.
Thoughtful founders think about their employees early, even though this is usually the last issue addressed in a transaction. That tension is normal. The reality is that what happens to your people depends heavily on the type of buyer, the structure of the deal, and how communication is handled before and after closing. Good intentions alone are not enough—and in some cases, they can create legal or operational problems if handled incorrectly.
How Buyer Type Affects Outcomes for Employees
Strategic Buyers
With strategic buyers, outcomes vary based on scale and intent. If the buyer is acquiring your company for geography, product, or market access, they may allow the business to operate largely as-is. However, overlapping functions—finance, HR, administrative roles—are often consolidated. This is usually about efficiency, not malice, and it is common in larger organizations where duplicate departments don’t make sense.
Private Equity Buyers
Private equity buyers typically rely on existing management and teams to run the business. They are not operators, and they usually want continuity. In many cases, a private equity buyer may actually add roles—such as a CFO, controller, or new systems—to support growth. Workloads can increase, reporting requirements change, and expectations rise, but widespread immediate layoffs are less common unless the acquisition is part of a broader consolidation strategy.
What Founders Should Not Do Before Closing
Don’t Tell Everyone Early
Even well-intentioned transparency can cause damage. You are bound by confidentiality agreements, and premature disclosure creates fear, distraction, and attrition—especially among key employees.Losing critical team members mid-process can derail a transaction or materially weaken your negotiating position.
Don’t Over-Promise
Reassuring employees that “everyone will be fine” or that no one will be laid off may feel right in the moment, but it can create legally actionable commitments.You do not control post-closing decisions unless you are willing to walk away from the deal. Most founders are not—and should not pretend otherwise.
What Founders Can Do to Protect Their People
While you can’t control everything, you can signal intent and structure around it.
Transaction bonuses can be funded from proceeds for employees who may be impacted
Retention payments can be structured to keep key people through transition
Incentives can be split between closing and future payroll-based payments
Expectations can be discussed with buyers without making binding promises
These tools allow founders to support their teams without jeopardizing the deal or creating personal liability.
Communication Timing Matters
Employees are usually informed right before closing or immediately after, often in an all-hands meeting or a tightly coordinated series of meetings.
Founders should lead that communication whenever possible. This includes:
Why the company is being sold
Whether the founder is staying or leaving
What is known (and not known) about next steps
How employees will be supported through transition
In some cases, having leadership from the acquiring company present helps establish trust and clarity.
The Reality: Most Employees Will Be Fine
In most transactions, the majority of employees keep their jobs. Titles may change. Compensation may be adjusted. Reporting structures may shift.
Some roles may be eliminated. That’s part of the reality of acquisitions. When founders plan for this early and structure thoughtfully, transitions are smoother and outcomes are better—for everyone involved.
What happens to your people is not just an HR issue—it’s part of your legacy as a founder.
Candor Advisors works with founders who care about outcomes beyond price alone. That includes helping founders think through employee impact, retention strategies, communication timing, and how to balance responsibility with realism. You can’t control every outcome. But you can approach this part of the funnel with intention, discipline, and respect for the people who helped you get here.
Congratulations. You’ve made it through the funnel.
