181–190 of 209 posts
> Corporate Development, aka corp dev, is the group within companies that buys other companies. If you're talking to someone from corp dev, that's why, whether you realize it yet or not. Can someone piece this together? > I remember once complaining to a friend at Google about some nasty trick their corp dev people had pulled on a YC startup. "What happened to Don't be Evil?" I asked. "I don't think corp dev got the…
I think one of the more interesting aspects to this is how much PG has followed his own advice with YC. i.e. he made something people (founders) wanted with YC. That allowed him to craft the entire experience around what is good for founders which worked out to be great for others (including investors and acquirers). So much so that this advice he is giving, I am sure many other investors have wanted to give publicly…
But PG sold ViaWeb to Yahoo, didn't he? So if we shouldn't talk to CorpDev, how should those deals happen?
Earlier quoted context omitted.
Maybe the startup should stop the whining and compensate its key employees a little better then.
I totally agree that the free market should set salaries for talented people, but consider the case when a startup is winding down and looking for a soft landing, if the acquirer picks up the top employees and ruins the last bit of hope the company has then the non "rockstar" employees would all be out of jobs and have nothing but a failed company on their resume to show for it. Also, and I may be biased but it feels…
Sounds like a merit-based scenario to me.
Simply reading through HN for several years, it seems pretty obvious to me that many startups view employees and "theirs". There is no scenario where I would hurt my future opportunities simply so I don't hurt my (sinking) company's.
I owe nothing more than the agreed-upon work for money to my current company, and watching out for #1 is what has been so successful for me these past several years.
A smart developer would stay at current company if she truly believed there was a successful acquisition on the horizon. If she leaves with someone else, that's just the free market talking.
I used to be an investment banker and dealt with corp dev guys (gendered pronoun used intentionally and accurately) all the time. PG's article is spot-on. One additional thing to note is that the diligence process can be an intelligence-gathering bonanza for a larger acquiror. The information they glean can be either harmless to you (data points on employee shares/salaries allows them to build knowledge of early-stag…
> and a non-hire agreement that stops them from poaching your employees. Isn't that similar to what Google/Apple/etc were doing recently, and were rightfully lambasted for? My employer does not own me, they should have absolutely no say over what company can offer me a new position.
In practice this often looks like an agreement to only speak with a defined, very small number of people at the target and to absolutely not initiate conversations with anyone else.
If Acme Startup Inc is quietly exploring a sale to Google, and coincidentally one of its engineers drops a resume to Google's recruiters, she can still go work for Google, but rest assured that Google will document the hell out of who-contacted-who-when.
Also I can say first hand all of the shady deal playing is absolutely true. The members of the due-diligence team and even the corp dev director you are dealing with are NOT the final decision makers. We are building an internal package that makes it appealing to the corp dev VPs/CFO to bless (and take to the CEO to bless sometimes). It's several layers of vetting and it's just as tedious and bureaucratic as it sounds.
I will say that the due diligence team typically will want the deal to be successful. No one wants to put in all that work to not buy a company. Corp Dev's job is to buy companies so having deals reach the 11th hour and fall through is NOT good. They pride themselves on stats like companies evaluated/year (wide funnel) and having a small fraction actually go to due diligence and the buying process. At the end of the day though, they want to buy businesses.
I used to be an investment banker and dealt with corp dev guys (gendered pronoun used intentionally and accurately) all the time. PG's article is spot-on. One additional thing to note is that the diligence process can be an intelligence-gathering bonanza for a larger acquiror. The information they glean can be either harmless to you (data points on employee shares/salaries allows them to build knowledge of early-stag…
Would you say this only applies to certain industries? Also what if the startup is only patent rich, is there anything to lose by talking?
I'm not a lawyer nor do I have a ton of experience in patent-related matters. If the startup is patent rich and is sitting on a mountain of cash, and feels like it's weird that it hasn't paid an astronomical sum of money to lawyers in a while, then maybe it could justifiably feel somewhat protected by its patents. Then again, look at Apple/Samsung over the years...I don't think patents are the be-all and end-all.
I used to work in corp dev at a big tech company (not a typical silicon valley). This is pretty much spot on by Paul Graham per usual. I was typically the one doing the initial contact with companies (as a junior analyst on the team). I always found it interesting how many HUGE replies I got back from startups. I rarely ever saw a company take PG's advice and say not interested. Companies that were over-zealous were…
Do you think mediocre companies tend to be over-zealous, or are you implying that appearing socially proofed is an important signal?
In the "hot girl at the bar" analogy, playing games is +EV, but I would expect the big league players are too smart for that, am I wrong?
Ex-car salesmen?
I used to work in corp dev at a big tech company (not a typical silicon valley). This is pretty much spot on by Paul Graham per usual. I was typically the one doing the initial contact with companies (as a junior analyst on the team). I always found it interesting how many HUGE replies I got back from startups. I rarely ever saw a company take PG's advice and say not interested. Companies that were over-zealous were…
" Companies that were over-zealous were definitely thought less of while companies that played a more aloof game were chased. " Do you think mediocre companies tend to be over-zealous, or are you implying that appearing socially proofed is an important signal? In the "hot girl at the bar" analogy, playing games is +EV, but I would expect the big league players are too smart for that, am I wrong?