M&A

“We also look for businesses where we have, you know, direct connections with the funding groups and in the M&A environment. So I prefer businesses where if they're doing really, really well, I know who to go to get them financed. And I know who to go to when t…”

“I mean M&A is hard in, in general. I think most big companies are not good at M&A. I think like Cisco used to have a good reputation for doing good M&A. Boy, Facebook I think has done a great job. I think in the last week they'll be done. But outside of that, …”

“Because for me, if you start planning for M&A exits from day one, they never end up, in my experience, being quite as large as you would think. Because you've kind of engineered all of the upside out of the company in kind of trying to tailor make it for M&A.”

“Track record of M and A having done a little bit of it at Cisco in my era is broadly speaking, not super successful. You know, you have to do a lot of them and many of them fail, which is the right methodology.”

“Funding rounds are interesting. It could either signal that someone, you know, could be open or interested in M&A, or it could mean they've gotten beyond what we could do a deal in, and maybe they're out of our range.”

“There's two big forcing functions for codifying company strategy, and I think one of those is financings and raising money, and then the other is M&A”

“And the models that you build during M&A inherently have a lot of made-up numbers in them, but once you have worked with someone in a partnership, you're replacing a lot of the guesswork with real actual numbers based on a live implementation, which helps in a…”

“My math is never do a merger and acquisition deal if you wouldn't pay double. Because the ones that work, basically a year later, they're twice as valuable as you thought they were. And the ones that don't work, the amount you spend probably doesn't matter.”

“One is that the tech giants have in many cases gotten really good at copying emerging startup products, so they don't need to deal with the hassle of acquiring, not to mention the hassle of potential regulatory scrutiny for M&A.”

“I think that the best VCs, especially in the M&A process, can act both as a balancing and a calming factor for founders. It's an incredibly difficult and challenging task for a founder to sell their company, whether it's big or small. There's just a lot going …”

“I hate that saying, because I think it's a trite way of describing the M&A world, and I think it really ignores almost all of the nuance.”

“And so I just think that it gives this view that's like, oh, just keep your head down, build a great product. And like someday an acquirer will come knocking at your door. And I think that's a really, really rare occurrence. I just don't think things happen th…”

“One factor that I think has moderated prices a little bit is that M&A has become the absolute primary method of exits.”

“So I have, for a variety of reasons, not Participated in secondaries so far, and I believe that there will be exits, that great companies eventually will exit, that we will see a return to some larger M&A in markets where it becomes so critical for some of the…”

“Any company that has a market cap of a few billion or more, in my opinion, if they're new, should actually be buying up other companies pretty rapidly, and I think in some cases, those teams just haven't hired a corp dev person, or they haven't professionalize…”

“Is that you should not waste too much effort on it and try to always make them a learning experience or draw some other use from them because otherwise you just spin your wheels a lot.”

“The recipe to fail in M&A is that it's the head of CorpDev and the CEO who make the decisions, right? It has to be deeply integrated into the process of how product and engineering work at the company.”

“Mike Volpe, who was famously that head of Corp Dev at Cisco during the heyday of Cisco M&A, he once said something to me, which I never forget. He said, never get the right deal, get the right company. And I think that that really holds true today.”

“Founders like the idea of M&A, but In many cases, what they'll do as they kind of unpack M&A and do due diligence is they'll say, you know what, actually we can build this ourselves. We don't necessarily need to buy it. And so I've just seen this too many time…”

“Talent is a great way to do M&A, but in that case, you probably don't need like one dedicated senior head of corp dev.”

“I'm not sure the FTC is going to let those deals happen. So that adds a curveball in M&A that we have not had easily in a generation, which is this very, very restrictive regulatory environment where a bunch of the logical buyers, the FAANGs, for instance, are…”

“Not to look at growth or even product building as one specific thing to grow your product. You can look at it in terms of SEO or paid loops or viral, but it's also about M&A and building entirely new products.”

“The appetite to Just do rapid set of acquisitions in this market. I don't think it's going to happen. And then in the private markets the key question that's going to come up is what price do you believe? Right? Meaning if you're a private company and you've r…”

“And really very few companies are in the position of fielding multiple offers. Your goal is really to optimize, to get an offer and get it over the line. And I think oftentimes entrepreneurs forget that.”

“So I think M&A is going to go to shit. I think anything sub a billion is not meaningful enough for M&A teams and corp dev teams to actually engage with. And I think anything over a billion is going to be incredibly arduous to get over the line from a regulator…”

“From a regulation standpoint, it is really hard to see any large-scale M&A.”

“You always want the previous deal. This is the stage where you always want the previous deal. You want what they off, what you could have had before, and you have to preempt that, meaning you have to realize that it only gets worse from here, and so you actual…”

“The worst M&A years we've had ironically are when there's been a market crash and you'd think that that would be the time that buyers really step up and go on a bargain basement hunting expedition. But it's similarly a time when Sellers still think that they'r…”

“If you look at the average cloud software play, which is where a lot of the activities happen in M&A, we're kind of back to that six to eight times revenue area that it's traded up for most of its existence”

“I think the impact that will have is that the concentration of returns in venture is going to be even smaller as they're going to be fewer companies that ultimately account for that, that performance.”

“M&A is pretty much fucked.”

“So my company TradeWeb has, you know, largely gotten to where we are today through a lot of like really good sort of, you know, organic investments and organic growth. Right. So we are not some company that's arrived here through lots of like M&A.”

“When you bring, when you merge other companies into your company, you have to have a strong sense of identity to allow other companies to be able to flourish as a part of your company and not try to suffocate them out of insecurity”

“We would never underwrite something dependent on M&A.”

“M&A can be innovation. It's not just buying for customers or revenue. We don't even do that. We buy for product quality and adjacency, and it jumpstarts the innovation.”

“Liquidity has been a major problem and especially during the four years of Biden and it just coincided with really bad policies and, you know, a derf of M&A lack of IPOs I think that's gonna change in the next four years.”

“Eventually, when you're the number two and you get the heavy squeeze from the adjacent acquirer, it often makes sense to fold because, you know, because otherwise they might buy the number one and then you're done.”

“And with M&A, it's the same thing. I actually think it's, do you have prior experience working with this company? Yes or no? So I would say that's the number one advice is like, Have you worked with them before?”

“And then the life lesson for founders, it's tough is look, Scott's gone now. Right. It's always a weird thing when you do M&A and it's not with the CEO because there's a good chance you outlast them.”

“If you're not one of the key players, the minute you move away from the cap table to, you know, making it up as you go along, if you're not one of the key players, you're very vulnerable to, you know, you're basically, Depending on the kindness of strangers, a…”

“Being number two, just as founders, it's a cheat code. Like just don't raise too much. Be acquirable. If you're number two, be kind. Right? And you'll be shocked in frothy times the offers you'll get.”

“Look, it's not going to make them, quote, an AI leader, but it, you know, they're doing the smart thing that existing corporations do, buying relatively new technology to, you know, to try.”

“If you get an M&A offer as a founder or an investor, and the founders make the decisions, the VCs don't make the decisions. If your TAM isn't really accelerating, take it.”

“That's how number two and number three get bought. Not because there's a panic for land grab, but because I didn't get what I wanted, right? That, that, that's when you got to be really thoughtful as number two because that that's when you get bought as number…”

“I won't be surprised to see a huge wave of M&A of these businesses, because they're still good businesses fundamentally, or you can make them good businesses, And they just aren't going to be, like, Stripe, or these massive things that capture fundamental piec…”