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Oct 2, 2017 · 23m · 20vc

20VC: 3 Things Acquirers Look For In Startup M&A's, How To Price A Startup Acquisition & The Biggest Risk of M&A with Matt Switzer, SVP of Corporate Development @ Hootsuite

Matt Switzer · 15m spoken Harry Stebbings · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The 20 Minute VC, host Harry Stebbings interviews Matt Switzer, SVP of Strategy and Corporate Development at Hootsuite, about how tech acquirers evaluate, price, and execute M&A deals. Switzer details Hootsuite's 'Three T's' framework, strategies for mitigating integration risk, and actionable advice for startup founders navigating exit opportunities.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Harry holds 31.9% of the talking time here. How this is scored →

Harry as informed peer 3.8 Guest teaching 2.8 Guest disagreement 0.3 Harry pushing back 1.5
05100:0010:0020:002:29–4:50 · Harry as informed peer 2/10 Matt Switzer's Career Background and Journey to Hootsuite Harry welcomes Matt and asks a open background question about how he entered the startup world. Matt provides a detailed history of his career from CS graduate to investment banking, VC, and joining Hootsuite.4:50–7:27 · Harry as informed peer 3/10 Hootsuite's M&A Strategy and the "Three T's" Evaluation Framework Matt explains Hootsuite's M&A evaluation framework, introducing the 'Three Ts' (Technology, Talent, and Traction). Harry asks a helpful clarifying question on whether all three criteria must be met.7:27–10:42 · Harry as informed peer 4/10 Mitigating Integration Risk and Early Pipeline Engagement Harry presses on practical execution details of early relationship building and outreach channels. Matt breaks down integration risk mitigation and how Hootsuite establishes early trust with potential target founders.10:42–12:55 · Harry as informed peer 5/10 Pipeline Monitoring Systems and M&A Priority Signals Harry cites Josh Felser's quote about social tracking and presses Matt on what signals trigger high priority M&A alerts, mentioning competitors like Buffer. Matt playfully dismisses the exhaustive tweet tracking premise and explains their internal process.12:55–18:51 · Harry as informed peer 6/10 Startup Founder Strategy: Timing, Valuation, and the Role of VCs Harry demonstrates strong industry context by quoting Rishi Garg, bringing up the 'bought vs sold' adage, and offering his own VC perspective on board dynamics. Matt provides an in-depth breakdown of how buyers weigh build vs. buy ROI and valuation.18:52–21:46 · Harry as informed peer 3/10 Rapid-Fire Q&A, Leadership Lessons, and the AdEspresso Acquisition The conversation transitions into a quick-fire round covering leadership, favorite books, and the strategic rationale behind Hootsuite acquiring AdEspresso.2:29–4:50 · Guest teaching 1/10 Matt Switzer's Career Background and Journey to Hootsuite Harry welcomes Matt and asks a open background question about how he entered the startup world. Matt provides a detailed history of his career from CS graduate to investment banking, VC, and joining Hootsuite.4:50–7:27 · Guest teaching 4/10 Hootsuite's M&A Strategy and the "Three T's" Evaluation Framework Matt explains Hootsuite's M&A evaluation framework, introducing the 'Three Ts' (Technology, Talent, and Traction). Harry asks a helpful clarifying question on whether all three criteria must be met.7:27–10:42 · Guest teaching 3/10 Mitigating Integration Risk and Early Pipeline Engagement Harry presses on practical execution details of early relationship building and outreach channels. Matt breaks down integration risk mitigation and how Hootsuite establishes early trust with potential target founders.10:42–12:55 · Guest teaching 3/10 Pipeline Monitoring Systems and M&A Priority Signals Harry cites Josh Felser's quote about social tracking and presses Matt on what signals trigger high priority M&A alerts, mentioning competitors like Buffer. Matt playfully dismisses the exhaustive tweet tracking premise and explains their internal process.12:55–18:51 · Guest teaching 4/10 Startup Founder Strategy: Timing, Valuation, and the Role of VCs Harry demonstrates strong industry context by quoting Rishi Garg, bringing up the 'bought vs sold' adage, and offering his own VC perspective on board dynamics. Matt provides an in-depth breakdown of how buyers weigh build vs. buy ROI and valuation.18:52–21:46 · Guest teaching 2/10 Rapid-Fire Q&A, Leadership Lessons, and the AdEspresso Acquisition The conversation transitions into a quick-fire round covering leadership, favorite books, and the strategic rationale behind Hootsuite acquiring AdEspresso.2:29–4:50 · Guest disagreement 0/10 Matt Switzer's Career Background and Journey to Hootsuite Harry welcomes Matt and asks a open background question about how he entered the startup world. Matt provides a detailed history of his career from CS graduate to investment banking, VC, and joining Hootsuite.4:50–7:27 · Guest disagreement 0/10 Hootsuite's M&A Strategy and the "Three T's" Evaluation Framework Matt explains Hootsuite's M&A evaluation framework, introducing the 'Three Ts' (Technology, Talent, and Traction). Harry asks a helpful clarifying question on whether all three criteria must be met.7:27–10:42 · Guest disagreement 0/10 Mitigating Integration Risk and Early Pipeline Engagement Harry presses on practical execution details of early relationship building and outreach channels. Matt breaks down integration risk mitigation and how Hootsuite establishes early trust with potential target founders.10:42–12:55 · Guest disagreement 1/10 Pipeline Monitoring Systems and M&A Priority Signals Harry cites Josh Felser's quote about social tracking and presses Matt on what signals trigger high priority M&A alerts, mentioning competitors like Buffer. Matt playfully dismisses the exhaustive tweet tracking premise and explains their internal process.12:55–18:51 · Guest disagreement 1/10 Startup Founder Strategy: Timing, Valuation, and the Role of VCs Harry demonstrates strong industry context by quoting Rishi Garg, bringing up the 'bought vs sold' adage, and offering his own VC perspective on board dynamics. Matt provides an in-depth breakdown of how buyers weigh build vs. buy ROI and valuation.18:52–21:46 · Guest disagreement 0/10 Rapid-Fire Q&A, Leadership Lessons, and the AdEspresso Acquisition The conversation transitions into a quick-fire round covering leadership, favorite books, and the strategic rationale behind Hootsuite acquiring AdEspresso.2:29–4:50 · Harry pushing back 0/10 Matt Switzer's Career Background and Journey to Hootsuite Harry welcomes Matt and asks a open background question about how he entered the startup world. Matt provides a detailed history of his career from CS graduate to investment banking, VC, and joining Hootsuite.4:50–7:27 · Harry pushing back 1/10 Hootsuite's M&A Strategy and the "Three T's" Evaluation Framework Matt explains Hootsuite's M&A evaluation framework, introducing the 'Three Ts' (Technology, Talent, and Traction). Harry asks a helpful clarifying question on whether all three criteria must be met.7:27–10:42 · Harry pushing back 2/10 Mitigating Integration Risk and Early Pipeline Engagement Harry presses on practical execution details of early relationship building and outreach channels. Matt breaks down integration risk mitigation and how Hootsuite establishes early trust with potential target founders.10:42–12:55 · Harry pushing back 3/10 Pipeline Monitoring Systems and M&A Priority Signals Harry cites Josh Felser's quote about social tracking and presses Matt on what signals trigger high priority M&A alerts, mentioning competitors like Buffer. Matt playfully dismisses the exhaustive tweet tracking premise and explains their internal process.12:55–18:51 · Harry pushing back 3/10 Startup Founder Strategy: Timing, Valuation, and the Role of VCs Harry demonstrates strong industry context by quoting Rishi Garg, bringing up the 'bought vs sold' adage, and offering his own VC perspective on board dynamics. Matt provides an in-depth breakdown of how buyers weigh build vs. buy ROI and valuation.18:52–21:46 · Harry pushing back 0/10 Rapid-Fire Q&A, Leadership Lessons, and the AdEspresso Acquisition The conversation transitions into a quick-fire round covering leadership, favorite books, and the strategic rationale behind Hootsuite acquiring AdEspresso.

speaking balance: gold is Harry, purple is the guest (3 minute bins)

0:00 · Harry 87.2% · guest 12.8%0:00 · Harry 87.2% · guest 12.8%3:00 · Harry 13.5% · guest 86.5%3:00 · Harry 13.5% · guest 86.5%6:00 · Harry 12.8% · guest 87.2%6:00 · Harry 12.8% · guest 87.2%9:00 · Harry 21.6% · guest 78.4%9:00 · Harry 21.6% · guest 78.4%12:00 · Harry 20.2% · guest 79.8%12:00 · Harry 20.2% · guest 79.8%15:00 · Harry 24.3% · guest 75.7%15:00 · Harry 24.3% · guest 75.7%18:00 · Harry 20.7% · guest 79.3%18:00 · Harry 20.7% · guest 79.3%21:00 · Harry 75.3% · guest 24.7%21:00 · Harry 75.3% · guest 24.7%
Sharpest disagreement ▶ 11:03 Playful rejection of tweet-monitoring premise

Matt playfully pushes back against Josh Felser's quote cited by Harry that every tweet is an M&A investigation, remarking 'Oh my God, that sounds exhausting.'

 Hardest push from Harry ▶ 12:03 Harry presses for specific M&A prioritization triggers

Harry does not accept a vague monitoring answer and directly asks what specifically makes a situation high priority, raising competitor moves like Buffer.

 Biggest teaching moment ▶ 16:38 Matt details buyer ROI and build vs buy logic

Matt educates the host on how corporate buyers internally evaluate valuation by comparing build versus buy costs and placing value on painstaking product-market fit.

 Harry holds his own ▶ 12:55 Harry cites Mayfield VC Rishi Garg to frame startup M&A strategy

Harry showcases his industry expertise and network by referencing VC Rishi Garg to challenge Matt on when early stage founders should start building an M&A pipeline.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Matt Switzer's Career Background and Journey to Hootsuite 2100 Harry welcomes Matt and asks a open background question about how he entered the startup world. Matt provides a detailed history of his career from CS graduate to investment banking, VC, and joining Hootsuite.
Hootsuite's M&A Strategy and the "Three T's" Evaluation Framework 3401 Matt explains Hootsuite's M&A evaluation framework, introducing the 'Three Ts' (Technology, Talent, and Traction). Harry asks a helpful clarifying question on whether all three criteria must be met.
Mitigating Integration Risk and Early Pipeline Engagement 4302 Harry presses on practical execution details of early relationship building and outreach channels. Matt breaks down integration risk mitigation and how Hootsuite establishes early trust with potential target founders.
Pipeline Monitoring Systems and M&A Priority Signals 5313 Harry cites Josh Felser's quote about social tracking and presses Matt on what signals trigger high priority M&A alerts, mentioning competitors like Buffer. Matt playfully dismisses the exhaustive tweet tracking premise and explains their internal process.
Startup Founder Strategy: Timing, Valuation, and the Role of VCs 6413 Harry demonstrates strong industry context by quoting Rishi Garg, bringing up the 'bought vs sold' adage, and offering his own VC perspective on board dynamics. Matt provides an in-depth breakdown of how buyers weigh build vs. buy ROI and valuation.
Rapid-Fire Q&A, Leadership Lessons, and the AdEspresso Acquisition 3200 The conversation transitions into a quick-fire round covering leadership, favorite books, and the strategic rationale behind Hootsuite acquiring AdEspresso.

Statements from this episode (10)

Insight
Fundraising and M&A force startups to codify their company strategy
“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”
Matt Switzer Oct 2, 2017 ▶ 5:08
Insight
Technology, talent, and traction are the three M&A value drivers
“Ours is called the three T's, and these are really the three sources of value in a transaction. Everything that we do here through the M&A process centers around these three T's, and they are technology, talent, and traction.”
Matt Switzer Oct 2, 2017 ▶ 6:23
Assertion Not checkable as stated
Hootsuite involves talent assessment in every acquisition deal
“For us at least, talent is involved in every transaction that we do. It's very rare we pursue a transaction without that Particular T being in place.”
Matt Switzer Oct 2, 2017 ▶ 8:35
Assertion Partly supported
Most Hootsuite acquisition targets were existing business partners first
“If you look at the transactions that we've done, disproportionately, they've been partners with Hootsuite before we've engaged.”
Matt Switzer Oct 2, 2017 ▶ 9:14
Assertion Not checkable as stated
Hootsuite's M&A team holds substantive discussions with 300+ startups annually
“Over the course of a year, we will have substantive, and this is probably 30 minute, at least, discussions with over 300 companies over the course of a year, and so we're a relatively small acquisition team, and that's a lot of contact”
Matt Switzer Oct 2, 2017 ▶ 9:50
Insight
Funding rounds signal M&A availability or price startups out of acquisitions
“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.”
Matt Switzer Oct 2, 2017 ▶ 12:17
Insight
Startups built specifically to sell early are obvious to acquirers
“Reaching out too early just defocuses the business, and can be a huge distraction, and businesses that have been built to sell early are really, really obvious to acquirers.”
Matt Switzer Oct 2, 2017 ▶ 14:51
Insight
Putting an explicit for-sale sign on a startup destroys value
“I think generally, unless you are in a situation where you absolutely need to sell, I think it's inadvisable to put a for sale sign in front of your company. I really think it's too much opportunity to destroy value. I think you can just leave too much value o…”
Matt Switzer Oct 2, 2017 ▶ 15:11
Disclosure
Hootsuite only engages VCs regarding M&A with startup management consent
“We almost always try to work through the management team directly, or if we are interacting with VCs, we are typically trying to do so with the consent of management.”
Matt Switzer Oct 2, 2017 ▶ 18:01
Insight
Acquirers prefer trusted founder relationships over engineered corporate perfection
“I think you often see startups trying to engineer the perfect process, trying to make the company look as perfect as it can possibly be, and I think probably the thing I like founders to know the most is really that trust is everything. You know, we, it's more…”
Matt Switzer Oct 2, 2017 ▶ 19:29
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