When greed gets in the way
Article Date: May 01 2007
Exiting a business can do strange things to business owners as the prospect of unprecedented riches comes close to reality. ‘The greed is phenomenal,' says Mark Duffin, a director at global services provider Rentokil Initial.
Duffin, who has managed three full exits and one flotation, tells GrowthBusiness.co.uk: ‘People react and respond to you in a particular way because the greed takes over [towards completion of the deal]. You have to stay true to the way you have always done business. Hopefully, this is in an honest and open manner.’
Examples of avarice taking hold include members of the management team feeling undervalued at their slice of the sales exit bonus or complaints that the value of the company is too low.
A potentially more damaging issue can arise over the sale-purchase agreement, which carries a set of warrants and liabilities for those who are closest to the deal: ‘It’s a different form of greed, where shareholders or board members will want to ensure they can mitigate their risk on to other members of their team,’ says Duffin.
Click here to read a feature on partial exits
