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What is corp dev’s role then?
Maybe they like an in house recruiter: they conduct negotiations and ease the process by meeting with both parties, but the yay/nay decisions are made by the hiring manager?
> M&A is one of two ways a pot of gold happens. I don't know what the second one he has in mind is; the some of the ones I know are: 1 - operate a profitable business that throws off a ton of cash (these can be huge, like Koch, Cargill, Aldi, and can make long term employees extremely, and privately, rich). 2 - sell part of your company to the public (IPO) 3 - sell the whole company (M&A) 4 - spin out or sell off a d…
> One major disadvantage of 2-4 is that other people tend to hear about it I don’t doubt this, but I’m curious: why do you see the publicity as a disadvantage?
> M&A is one of two ways a pot of gold happens. I don't know what the second one he has in mind is; the some of the ones I know are: 1 - operate a profitable business that throws off a ton of cash (these can be huge, like Koch, Cargill, Aldi, and can make long term employees extremely, and privately, rich). 2 - sell part of your company to the public (IPO) 3 - sell the whole company (M&A) 4 - spin out or sell off a d…
The second one the author had in mind is almost certainly IPO. Your (1) isn't a pot of gold in the colloquial sense of "suddenly finding a life-changing amount of money". Running a profitable business is ideal, especially in a post-ZIRP world, but it almost never culminates in a single "all my hard work has paid off, I can take it easy now" moment like IPO or acquisition.
That first time you pay yourself $20MM sure feels like that, and repurchasing from your employees or paying out large bonuses sure can for them too.
> like IPO or acquisition.
Have you been through either? "Take it easy now" is the opposite of what happens in an IPO -- you're now subject to the scrutiny of the financial press, SEC, and random shareholders when before you could send monthly updates to your board. And unless you avoided an earn-out in your acquisition, the slog just continues.
Earlier quoted context omitted.
> One major disadvantage of 2-4 is that other people tend to hear about it I don’t doubt this, but I’m curious: why do you see the publicity as a disadvantage?
A parasite’s best chance of survival is to avoid discovery.
> Deciders on M&A [do] not include the VP corp dev or the corp dev managers. Those are good relationships to have, but they don’t initiate large offers. What is corp dev’s role then? Maybe they like an in house recruiter: they conduct negotiations and ease the process by meeting with both parties, but the yay/nay decisions are made by the hiring manager?
They are supposed to go out and find interesting things in (or adjacent to) your space, get to know them, understand how they measure up among their peers and competitors, and bring all that information back to the company.
They're all waiting for the company - usually the CEO, CPO, or CRO - to say something like "we have a need for X."
Background: I was at Okta through the Stormpath, Azuqua, and Auth0 acquisitions. I didn't have a role in any beyond knowing the M&A team and observing it throughout.
> M&A is one of two ways a pot of gold happens. I don't know what the second one he has in mind is; the some of the ones I know are: 1 - operate a profitable business that throws off a ton of cash (these can be huge, like Koch, Cargill, Aldi, and can make long term employees extremely, and privately, rich). 2 - sell part of your company to the public (IPO) 3 - sell the whole company (M&A) 4 - spin out or sell off a d…
> One major disadvantage of 2-4 is that other people tend to hear about it I don’t doubt this, but I’m curious: why do you see the publicity as a disadvantage?
The Bay Area and Seattle have quite a few "unknown" billionares. For example if you had less than 5% of Microsoft when it IPOd you were not listed in the S-1, and if you hung on by the mid 90s you could have been worth 8-9 figures.
Work in M&A. Have been involved in 500+ M&A deals and also sold a company. These are very good insights!
If anyone is interested in how things tend to work if you're trying to proactively sell a company (especially a profitable one), I put together a write up a while back: https://www.fivecastfinancial.com/guides/how-selling-a-compa...
(I used to be an M&A advisor - no longer!)
At least someone's finally honest about it. Startup culture is in general a blight.
> I was advised that 50% of signed LOIs actually close. I bet it’s less. You will see the LOI and dream of trading stress for riches. Remember: Less than 50% chance of closing. 100% Which is why I hate that exclusivity is industry standard. It feels exploitative that acquirers can demand exclusivity in a deal when the chances of it closing are less than 80%. Imagine selling a house and taking it off the market becaus…