Not too long ago, small companies and their employees dreamed of an IPO. Stock options represented a significant portion of employee benefit packages, and paper millionaires bought fast cars and large houses. Fast forward to 2012. IPOs are way down.
Jay Ritter, a University of Florida finance professor, tracks technology IPOs and made this observation:
- 1999-2000: 628 IPOs
- 2001-2011: 366 IPOs
No IPO? Then M&A
If the IPO route is blocked, what’s happening to private companies? They’re getting acquired. And as an employee of a buyout target, that can be unnerving.
CNET has profiled some of the common acquirers and identified the different ways they treat their new acquisitions. The company that buys your employer usually dictates what’s going to happen next. Here are a few possibilities.:
- Assimilation. This is what happens if the acquirer is an Apple or IBM. The product name goes away publicly, the team structure gets changed to match that of the acquirer, and it all happens fairly quickly. In this case, expect to adopt your new employer’s practices soon after the acquisition is complete.
- Integration. This is a slower form of assimilation. The product will remain and the team will support it… at first. Over time, the product road map will include a lot more integration with the acquirer’s other products, and eventually will disappear. In this case, expect a bit of a disconnect for a while — supporting the old product in the pre-acquisition way, and developing the go-forward product in the acquirer’s way.
- Standalone. This is what Dell frequently does. If you liked life working for your old company, this is a lucky break. In acquisitions like this, most development processes don’t change, and the road map doesn’t vary greatly. It’s mostly life as it was before, but with new employee badges and probably some new marketing.
If you’re working for a company that gets acquired, your work life will certainly change. Take a look at the acquirer, and figure out what they’re likely to do. The new employer, new work, and new software development process might be different or very similar, but at least you’ll have a framework for figuring out what the change is likely to be.
- IPOs: Tables Updated Through 2011 [University of Florida]
- The paradox of Microsoft’s Skype acquisition integration [CNET]