“There were a lot of intangibles to deal with,” says Scheer and associate Dirk Olin who, with partners Mark Obbie and Joe Lamport, volunteered their time to lead the marriage between the Center for Software Development and the Software Forum.
Among the upside-down aspects of the deal: profit was unimportant, personnel loss was unacceptable, and consensus around almost every issue was required. On the other hand, a successful outcome would help prime the pump of Silicon Valley’s economic engine through its software-developer community. “With a nonprofit, you have to have unanimity around the mission,” explains Sandy Herz, executive director of the newly minted Software Development Forum, “because there is nothing else but the mission and the culture of the organization.” That meant the attorneys had to become aware of values that don’t often crop up in business combinations. “In a commercial merger, no one has to be sensitive about saying that one company is acquiring the other,” says Rees. “But here, simply using that word ‘survivor’ raised issues.” Getting buy-in from all involved — staff, volunteers, membership and both boards — was also a new task for the attorneys. “In a typical merger you want shareholder approval, but you know you’ll lose probably 5 percent,” says Rees. “Usually, you look around the board and see who has what shares, and see who you need,” she says. “But here, it gave personal trauma if everyone wasn’t supporting an element of the merger.” Blending the two organizations also raised technical issues. According to Bradley, although nonprofit mergers are not uncommon, “It is rare to see two different breeds brought together,” such as the Center, a 501(c)3 educational organization, and the Forum, a 501(c)6 trade group.FACE TIME WITH VCs The Forum’s two pr