My Merger Didn’t Go the Way I Expected. Here’s What I Learned — and What Every Founder Must Prepare for.

As M&A activity surged in 2025, with projections showing U.S. M&A volume hitting $2.3 trillion this year, founders across every industry are exploring exit strategies. But here’s the reality check — research analyzing 40,000 mergers over 40 years found that 70-75% of M&A deals fail to achieve their stated objectives, according to The M&A Failure Trap by NYU professor Baruch Lev and University at Buffalo professor Feng Gu. The term sheet you just signed doesn’t guarantee smooth sailing.

I recently navigated my own complex merger at InList, where I founded the company and served as CEO. Past investors wanted to renegotiate terms despite my controlling voting rights. The buyer’s operating approach triggered senior staff departures. Legal fees threatened to spiral as negotiations dragged on. What I thought would be straightforward became a masterclass in managing the unexpected.

Here’s what I learned about protecting yourself, your team and your business when mergers don’t go according to plan.

1. Voting rights matter on paper; relationships matter in reality

Past investors wanted to renegotiate the terms of the deal, even though they were greatly outnumbered by my voting rights. These were people who had contributed large sums of money when InList needed it most, even if their equity stakes had become relatively small over time.

I still did my best to accommodate their wishes where reasonable. The lesson here is that voting rights give you legal control, but relationships determine whether your merger creates lasting value or lingering resentment. Even when you have the upper hand, past investors who wrote significant checks deserve consideration.

I chose to work with them, not because I had to, but because burning bridges rarely serves long-term interests — especially in tight-knit industries where reputations travel fast.

2. Misaligned expectations will cost you talent

The buyer was not easy to deal with. Things I thought we had an understanding on turned out very differently. His approach caused senior staff to quit. The buyer’s significantly different business model — shifting InList from making money on individual reservations to a membership-fee-based system — created immediate friction with team members who’d built their careers around the transaction-based model.

The key lesson: Your team doesn’t owe the new buyer anything. They owe you, the founder who hired them, honest feedback. Create space for those conversations early, before decisions are final. Had I better anticipated the culture clash, I could have negotiated transition protections for key team members or, at minimum, prepared them for what was coming.

3. Legal fees can devour deal value fast

Legal fees can easily get out of control in such a situation, with a lot of back and forth. Kroger’s experience is instructive: The company spent $684 million in 2024 alone on merger-related costs. While our transaction was substantially smaller, we faced similar cost pressures as negotiations stretched on and issues multiplied.

The broader principle is to set clear fee structures upfront and to recognize when you’re paying lawyers to negotiate points that don’t materially affect the deal’s outcome. Every additional round of redlines costs money. Sometimes the best negotiation tactic is knowing when to let the other side win a minor point to keep the deal moving.

4. Protect yourself if you’re staying on

My role continues after the merger, even though I will then be a minority shareholder. This is where many founders make critical mistakes. You need to protect yourself so you’re not providing guarantees if you remain on for a transition period or as a consultant.

If you’re signing personal guarantees, agreeing to earnouts tied to metrics you can’t fully control or taking on operational responsibilities without clear boundaries, you’re exposing yourself to significant downside risk with limited upside.

Get everything in writing. Document your scope of authority, your compensation structure, your exit triggers and your liability limitations. Future you will thank present you.

5. Get creative with entity structure to solve legacy problems

One of the most valuable solutions I implemented came from addressing a common founder headache: legacy equity promises. My former partner promised a “bit” of equity in InList to various contributors. He left me with that mess to clean up.

Rather than bringing the new partners directly into the existing InList Inc. entity — which would have required addressing all those legacy equity commitments — I formed a new entity. The new partners and InList Inc. became partners in this new structure, and we transferred all of InList’s assets into it. Nobody gets bogged down with any equity changes in InList Inc.

This creative restructuring saved us months of negotiation and potential disputes with minor equity holders. If you’re sitting on a messy cap table from years of small equity grants, consider whether a similar structural solution might work for your situation.

6. Good faith builds goodwill, but stay prepared for the worst and be willing to make compromises

Throughout this process, the buyer demonstrated good faith in important moments. The buyer started paying certain expenses before the official deal was signed, which helped build trust and showed commitment. However, I also stayed prepared to pursue other options should it fall through — trust doesn’t mean naivety.

I also ended up “caving” on some terms of the deal I personally felt were fair and required, in order to see it through. Be prepared to not get everything from your wish list. The key for me was in doing what was right for my business’s shareholders. Whatever the best deal could be for InList, that was the deal I would do my best to see through.

The buyer, Christian Jagodzinski of Villazzo, 007 Percent and Desdemona Capital, brought relevant experience from his successful exit in Germany. His social network for the elite, 007 Percent, created natural synergies with InList’s access to exclusive venues and events. That strategic alignment made the operational friction more manageable because we shared a common vision for where the combined business could go.

Build legal protections, maintain relationships even when you have leverage, communicate honestly with your team, get creative about structural solutions, and be prepared for final terms to be re-negotiated. The initial term sheet is just the beginning.