Exit Interview
TWO-TIME SELLER
Tips from one of the few founders who have sold the same company twice.
Lissy Hu
SCHOOL PROJECT Hu co-founded CarePort Health, which makes software to help hospitals create post-stay care plans for patients, for a Harvard Business School competition in 2012.
FIRST MOVE In October 2016, she sold the Bostonbased company to health tech giant Allscripts, but retained her CEO title.
STILL IN CHARGE In December 2020, Hu led CarePort through a $1.35 billion sale to health tech company WellSky, while again maintaining operational control.
Less than a decade ago, Lissy Hu was struggling to raise venture capital. Today, she’s one of the rare entrepreneurs who have gotten the same company acquired multiple times—and she has some vital advice for any founder who’s thinking about selling. —CAMERON ALBERT-DEITCH
What are the biggest differences between your first acquisition and the one you recently closed?
The scale is orders of magnitude different. The fundamentals are very similar. Both deals were customer-led. We’re very strong in nursing homes and home health agencies, but a lot of our customers have said they need things like behavioral care, a place to get their infusions, and community-based services like Meals on Wheels that go beyond the post-hospital care settings we’re in now. WellSky has a significant post-ICU network that’s complementary to the network we have.
What’s your best advice for founders who are on the fence about selling?
Before the first acquisition, people told me, “Once you’re acquired by this big company, you don’t know what’s going to happen. If they decide in a year that it’s not aligned with their overall strategy, they may shutter it completely.” When you’re making these decisions, really think through how much alignment there is between your product and the parent company’s product. Do they believe in the vision that you believe in?
Do you recommend that other founders press to keep control of their startups post-acquisition, as you did?
You have to think critically. Most entrepreneurs start companies because they’re mission-driven. You have to believe in it against all odds. Any other sign, you just brush away. So, naturally, if you have that level of commitment, it’s a little bit easier for you to say to yourself, “Is this the best thing for the company? Is giving up control the best way to accomplish my vision?” Try to take a little bit of the ego out of it.
Having gone through this process twice, what are the biggest red flags you’ve seen, and how can you avoid them?
People think that these acquisitions are the holy grail of entrepreneurship—that you’ve really made it when you’ve sold your company. But you have to live with it on the other side. It’s important to spend a lot of time on the reverse due diligence. What’s it going to be like for my team? How are we going to fit in? How much autonomy do we have? It’s not just get the check and then you’re off.
Selling a company is complicated. Get advice from the founders of companies like Qualtrics, Bonobos, and Chewy at inc.com/magazine.