M&A founder lessons: Valuable insights from PlanGrid’s $875M acquisition by Autodesk


In December 2018, Autodesk acquired PlanGrid for $875 million. I worked at Autodesk, assisting in integration for 15 months in the newly formed Autodesk Construction Group.

Integrating a startup into another company is like jumping into freezing cold water — there is an initial shock to the entire system. As founders, it was important that we took care of our team and ensured our products continued to work well for customers.

Companies are bought; they are not sold. Buyers typically pursue acquisitions to:

  • Gain market share and increase revenue and customer logos.
  • Remove a competing business from the market.
  • Expand their product lines and technical capabilities.
  • Expand in-house technical and sales expertise quickly.

This post is for anyone who has a signed LOI or term sheet with an acquirer and is looking for lessons learned on how to navigate the new world — what to anticipate and what to avoid. For folks who are talking to corp dev, read this. (For founders who want to sell their company right now: It is mentally, physically and emotionally taxing to live two competing realities — to envision two competing futures for your startup at the same time. Your job is to preserve optionality and make all options (including running your startup standalone) available if you want to entertain an M&A conversation. Do not risk slowing down in execution and growth to talk to corp dev.)

Lesson 1: Vision

After an acquisition, most companies prioritize product integration as their top concern. In our case, this was true as well. However, true product integration is often a lengthy and unsatisfying first priority, as it can take years to complete if it ever happens. Unless the architecture is exactly the same, and products somehow snap together nicely, the result is often a hodgepodge of incompatible products. The costliest challenge of focusing on product integration as the main priority is that it overlooks more critical needs. The top priority should be establishing and aligning on a shared vision.

Integrating a startup into another company is like jumping into freezing cold water — there is an initial shock to the entire system.

In 2019, we needed vision from leadership, and it would not come for several quarters. It wasn’t because of a lack of desire; there are just a lot of dependencies at a large company, and it takes time to run any decision up the flagpole.

In the early days, our teams, revenue targets, incentives and sales processes were not integrated. This led to construction customers receiving multiple sales calls from different teams within the same company, resulting in ARR churn and ARR shifting between product lines.

Takeaway

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