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2022-01-29

Re: Why Do Corporations Have to Grow?

tags: life


I'm late to the show, but I would like to add one more aspect. Maybe someone has already pointed this out and I did not see it.


In ew0ks own reply to the original post there is this:

> * Another company that was not by any means leading in its market, but has ~40 employees and around 170,000 customers. It's profitable and in no way threatened within its niche. Yet it agrees to be sold to a larger company.

gemini://warmedal.se/~bjorn/posts/2022-01-26-re-why-do-corporations-have-to-grow.gmi


This may have another explanation. I have seen this unfolding in my circles.


For the sake of the argument let's assume that a small number (even only one) of "Founders" have put their savings together to create Company from scratch. Their Company thrives and over the years aqcuires paying customers, employees, equipment, maybe even buildings and an excellent reputation/trademark. All is well. But then comes the time, where Founders want to remove themselves from Company, because they have crossed the 60 years line, or for whatever reason.


Now comes the difficult part. How to go about successors of Founders? There are several ways out, none of them is easy. You will learn a lot about local binding law, lawyers, trademarks, banks, investors, employees, family ... One way forward is to sell Company. For the sake of the argument, consider 100 000 Eu per employee. I have no idea about actual numbers, I believe this is a very low estimate. So with 40 employees we are looking at 4 million Eu, equipment and buildings not yet considered. "Someone" has to come up with this amount of money. So this is where bigger corporations enter the game, just because they have these magnitudes of cash available. And in one case the game went into the next round, where the buyer (some fairly big corporation) was bought by a much bigger corporation. All of a sudden you are employed by an international mega corporation, with all the funny and not so funny stuff, without even changing your desk once.


As an employee of Company it is easy to feel betrayed the day Founders sell Company. But ask yourself, what were the available options? And likewise it is not set in stone that you have to stay, if it unfolds unfavourably.



Cheers,

~ew


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