35 Employees, 4 PE Offers, and the Staff Reaction That Burned a Hole in His Soul

Have you ever considered how you would tell your employees you’ve sold your business? It’s one of the conversations most founders fear. You hope your employees will be happy for you, but you also worry some will view you as a sellout.

Dr. Michael Filosi experienced the entire spectrum of reactions when he told his 35 employees he had sold his dental practice, the biggest in Adelaide, to private equity. While he had some congratulations, he also had one team member walk out saying “that’s a bit disappointing,” and another who wouldn’t meet his eye for three days. This from a founder who never raised his voice, built the nicest staff room in the city and said good morning to every employee every day. In this episode you discover how to:

• Anticipate which employees are most likely to resent your exit (for Michael it was the reception team, not his highly paid dentists)
• Decide which staff conflicts to let burn instead of refereeing every one yourself
• Recognize when your danger detectors have taken over and you’re running the company on fight or flight
• Prepare for the possibility that the people you invested the most in won’t meet your moment the way you’d hoped
• Explain a business sale to a nine-year-old (Michael used his fist and his flat hand)
• Understand why the staff who complained the loudest now say they wish he’d come back
• Weigh whether a decade of going all-in on your business is worth what it takes out of you

Michael ran the sale himself, fielded four private equity offers and closed in 81 days with no earn-out, no equity roll and no retention period. A year on, he’s unusually candid about what the exit cost him, and the staff reaction is the part that still stings.

Show Notes & Links

Dr. Filosi’s first episode

Connect with Michael on LinkedIn

Definitions

Due-Diligence: This is a comprehensive appraisal of a business or investment undertaken before a merger, acquisition, or investment. It seeks to validate the information provided and uncover any potential risks or liabilities.

Earn-out: This is a financing arrangement for the purchase of a business, where the seller must meet certain performance goals before receiving the full purchase price. It reduces the buyer’s risk and aligns the interests of both parties post-acquisition.

Errors and Omissions Insurance (E&O): This is a form of liability insurance that protects companies and their employees against claims of inadequate or negligent actions, particularly in professional advice and services.

Re-Trading: This occurs when a buyer attempts to renegotiate the purchase price of a deal after initially agreeing to one. It is often seen unfavorably as it occurs after due diligence, seemingly exploiting newly discovered information.

About Our Guest

Dr. Michael Filosi

Dr. Michael Filosi is a dentist and the principal clinician at Fullarton Park Dental in Adelaide, where he has helped grow the practice into a modern, multi-surgery facility serving families and individuals across the Eastern suburbs. He earned his Bachelor of Dental Surgery from the University of Adelaide in 2006 and has worked both interstate and in South Australia before joining and expanding the Fullarton practice. Known for combining clinical expertise with a patient-first approach, Dr. Filosi is active in the local community and mentors aspiring dental professionals while continuing to enhance patient care and experience.