How critical is it to meet some employees prior to signing?

^Searchfunder member‌ This is one of those things that would be great, but in practice is incredibly hard. To put yourself in the seller's shoes. Imagine if they make the introduction and the deal falls apart for any number of reasons that are out of your / her control. Now they have the rumor mill to deal with, and it becomes an operational problem for them to ensure the employees that it is in the best interest of the company.

I think we were incredibly strong with retention, but even given that track record, we had two people leave because they had "bad experiences with takeovers." Fair enough (and one of them was a blessing in disguise), but that exact kind of rumor mill is what the seller is trying to avoid. Being the seller whose deal failed to get to close is almost worse. It hints at unresolved instability, whether or not that's actually the case.

What we did to mitigate was put together a performance profile of every single person in the firm. We got an idea of how the seller thought about the employee and how vital they were to the long-term operations of the company. From there, we spent our earliest relationship and culture capital on the most critical team members.

One additional step you can take is hiring a third party to interview everyone on the team and survey them about their feelings and experience with the company. That way you can match potential discontent to the "critical" people from the prior exercise and tease out some risk there.

One HUGE benefit we had (and is not guaranteed): our seller was incredibly accurate in his personnel assessments. I still look at those initial profiles and think: "Wow, this evaluation mostly holds water two years onward." We were in the incredibly fortunate to have worked with a seller that faithfully represented everything going on in the company.

I think the timing of employee introductions depends on whether or not the employees know the business is for sale. If they do know, discuss it with the owner. If they do not know and with such a small staff, losing a couple of key employees could ruin the business. Meeting key employees without a binding commitment is a big ask. You are asking the seller to risk their livelihood so you can save a few bucks on due diligence. In either case, communication is the key.