Shareholders and founders: The muted thrill of the deal closing.

Now you have worked for months to get this deal to the closing, anticipating the wire transfers to the shareholders that will come any minute.   This could change your lifestyle and give you that much needed pause in your life you have been looking forward to.

How it happens today

All the documents were signed in a rolling series of emailed scanned or DocuSign signature pages during the past week or more, with each party signing their own set, never having to be in the same room to sign the single signature page for each agreement.  And in the end, the deal that means so much to you closes with a whisper.  You check your bank account every half hour to see if the wire has been posted.

And if you are a major shareholder:

Finally, it arrives, and you see the balance in your account jump to a number you’ve never seen there before.  You pause for a minute to savor the victory.  And you go back to what you were doing right before that moment.  Or not.  But the closing was such a non-event that you wonder why people even call it a “closing.”

Congratulations.  You have joined an exclusive club and have earned your membership.

Memories of how it used to be

[Email readers, continue here…]   It used to be thrilling to participate in a real “live” closing.  The date and time of the closing would be published for all interested parties.  The lawyers for both buyer and seller would meet the day before to go over a “trial closing” to be sure all documents were ready to sign.  And on the appointed morning, often at 10 AM, all attorneys, the investment bankers, you and your buyer’s CEO would all gather in a large conference room with documents already spread around the conference table.

After pleasantries, you and your opposite CEO would pick up your (fountain) pens and start moving around the table, signing agreements in the appointed spots until your fingers were weak from the effort.  The lawyers would follow and check, then finally all nod that the work was done.  A handshake, applause, a promise to meet the next day, and a celebration closing meal either immediately following or at a future time sealed the deal for all.

Those were the days.  The smell of the newly copied papers, the smudges from the fountain pen ink, the tension followed by smiles all around, all contributed to the feeling that something grand was happening.

And my favorite closing memory…

My favorite closing followed this pattern with a twist.  There must have been 25 of us that arrived for a 4:00 PM closing after the day-before trial closing by the attorneys.  We all expected to be finished and out of there for a late dinner.  At five the next morning, after an all-night session with revisions, midnight calls to the buyer’s parent CEO in New York and more, we finally signed the papers, all completely worn out from the many anxious moments and long, long night.  All the parties vowed to go home and get some sleep.  I went home, took a shower, and went to work as if a typical day, working now as CEO of a subsidiary of a parent company.  And yes, I checked the bank account every half hour for the wire transfer.  Some things do not change.

For those of you who ever experience the muted thrill of today’s electronic closing, you can give a nod to those days when the sometimes-smoke-filled rooms were real and the tension palatable, when a closing was a face to face event.

 

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4 Responses to Shareholders and founders: The muted thrill of the deal closing.

  1. That is a an awesome story in the second to last paragraph of your favorite closing.

  2. Don Kasle says:

    Well done, Dave. You truly captured the wonderful feeling. However as the last lyrics in Tony Bennett’s song goes, “Once upon a time, NEVER comes again.”

  3. Terrell Jones says:

    Wow I really agree. and there used to be dinners! But with startups and boards scattered around the country they always talk about one last meeting and dinner but it never happens any more. Sometimes still get tombstones…my favorite was one from Kayak that says Kayak has purchased ‘x’ in a private transaction (at the bottom it says, ’we don’t use investment bankers 🙂

  4. My favorite closing ever — pulling an all-nighter with opposing counsel to get the opinion letter signed after numerous phone calls with the lawyers in Australia to close the OzEmail IPO at 5:30 in the morning, getting in my car, driving straight to the printer in Palo Alto (who remembers the printer?) and filing the S-1 for the E*TRADE IPO. Those were crazy days, and so much fun. Can’t imagine doing it all by pushing buttons. What a let-down.

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