StarZero All shows Try the podcast clipper →

Nov 22, 2017 · 26m · 20vc

20VC: Why Strategic Investing Is Slow Motion M&A, Why Valuation Is The Hardest Element of M&A & What Determines Between Cash vs Stock Deals with Chad Richard, SVP of Business & Corporate Development @ Yelp

Chad Richard · 17m 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 Chad Richard, SVP of Business and Corporate Development at Yelp, exploring strategic M&A, valuation complexities, and deal structuring. Chad shares lessons from Apple and Yelp on how partnerships, minority investments, and executive alignment drive successful tech acquisitions.

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 29.9% of the talking time here. How this is scored →

Harry as informed peer 3.7 Guest teaching 2.9 Guest disagreement 0.6 Harry pushing back 0.9
05100:0010:0020:002:52–7:02 · Harry as informed peer 3/10 Chad Richard's Early Background and Entry into Startups Harry asks Chad about his background and entry into tech M&A at Apple, prompting a detailed discussion on product-driven M&A versus revenue acquisition. Harry demonstrates solid host context by contrasting Apple's methodology with traditional financial acquisition models.7:02–9:07 · Harry as informed peer 2/10 Building the Deal Pipeline through Partnerships at Yelp Harry introduces the topic of Yelp's deal pipeline, and Chad details how combining business development partnerships with corporate development replaces guesswork with real operational metrics.9:07–11:42 · Harry as informed peer 4/10 Strategic Investments, Partnerships, and Founder Alignment Harry raises perceptive questions regarding founder anxieties around strategic corporate investments and exclusivity risks. Chad validates Harry's point, offering nuanced advice on timing strategic investments in later funding rounds.11:42–14:30 · Harry as informed peer 4/10 Yelp's Internal M&A Decision-Making Workflow Harry presses Chad for granular details on Yelp's internal decision-making process from corporate development approval to sign-off, introducing the term 'slow motion M&A'. Chad adopts the framing and breaks down internal stakeholder alignment.14:31–19:45 · Harry as informed peer 6/10 Valuation Challenges, Retaining Talent, and Cash vs. Stock Structure Harry demonstrates strong financial acumen by asking how deals are valued without P/E ratios and contrasting public acquirer stock deals with private mega-unicorns like Uber and Airbnb. Chad explicitly commends Harry for zeroing in on one of the hardest aspects of M&A.19:45–23:08 · Harry as informed peer 5/10 Founder M&A Strategies and the Role of VCs Harry cites investor advice from Rishi Gaug regarding startup M&A target pipelines and asks about VC involvement during deals. Chad gently reframes the advice around business development partnerships while highlighting the value of un-emotional VC advisors.23:08–25:00 · Harry as informed peer 2/10 Quickfire Round with Chad Richard Harry conducts a standard quickfire round covering books, blogs, and day-to-day challenges, which Chad answers cooperatively and succinctly.2:52–7:02 · Guest teaching 4/10 Chad Richard's Early Background and Entry into Startups Harry asks Chad about his background and entry into tech M&A at Apple, prompting a detailed discussion on product-driven M&A versus revenue acquisition. Harry demonstrates solid host context by contrasting Apple's methodology with traditional financial acquisition models.7:02–9:07 · Guest teaching 3/10 Building the Deal Pipeline through Partnerships at Yelp Harry introduces the topic of Yelp's deal pipeline, and Chad details how combining business development partnerships with corporate development replaces guesswork with real operational metrics.9:07–11:42 · Guest teaching 3/10 Strategic Investments, Partnerships, and Founder Alignment Harry raises perceptive questions regarding founder anxieties around strategic corporate investments and exclusivity risks. Chad validates Harry's point, offering nuanced advice on timing strategic investments in later funding rounds.11:42–14:30 · Guest teaching 2/10 Yelp's Internal M&A Decision-Making Workflow Harry presses Chad for granular details on Yelp's internal decision-making process from corporate development approval to sign-off, introducing the term 'slow motion M&A'. Chad adopts the framing and breaks down internal stakeholder alignment.14:31–19:45 · Guest teaching 4/10 Valuation Challenges, Retaining Talent, and Cash vs. Stock Structure Harry demonstrates strong financial acumen by asking how deals are valued without P/E ratios and contrasting public acquirer stock deals with private mega-unicorns like Uber and Airbnb. Chad explicitly commends Harry for zeroing in on one of the hardest aspects of M&A.19:45–23:08 · Guest teaching 3/10 Founder M&A Strategies and the Role of VCs Harry cites investor advice from Rishi Gaug regarding startup M&A target pipelines and asks about VC involvement during deals. Chad gently reframes the advice around business development partnerships while highlighting the value of un-emotional VC advisors.23:08–25:00 · Guest teaching 1/10 Quickfire Round with Chad Richard Harry conducts a standard quickfire round covering books, blogs, and day-to-day challenges, which Chad answers cooperatively and succinctly.2:52–7:02 · Guest disagreement 1/10 Chad Richard's Early Background and Entry into Startups Harry asks Chad about his background and entry into tech M&A at Apple, prompting a detailed discussion on product-driven M&A versus revenue acquisition. Harry demonstrates solid host context by contrasting Apple's methodology with traditional financial acquisition models.7:02–9:07 · Guest disagreement 0/10 Building the Deal Pipeline through Partnerships at Yelp Harry introduces the topic of Yelp's deal pipeline, and Chad details how combining business development partnerships with corporate development replaces guesswork with real operational metrics.9:07–11:42 · Guest disagreement 1/10 Strategic Investments, Partnerships, and Founder Alignment Harry raises perceptive questions regarding founder anxieties around strategic corporate investments and exclusivity risks. Chad validates Harry's point, offering nuanced advice on timing strategic investments in later funding rounds.11:42–14:30 · Guest disagreement 0/10 Yelp's Internal M&A Decision-Making Workflow Harry presses Chad for granular details on Yelp's internal decision-making process from corporate development approval to sign-off, introducing the term 'slow motion M&A'. Chad adopts the framing and breaks down internal stakeholder alignment.14:31–19:45 · Guest disagreement 1/10 Valuation Challenges, Retaining Talent, and Cash vs. Stock Structure Harry demonstrates strong financial acumen by asking how deals are valued without P/E ratios and contrasting public acquirer stock deals with private mega-unicorns like Uber and Airbnb. Chad explicitly commends Harry for zeroing in on one of the hardest aspects of M&A.19:45–23:08 · Guest disagreement 1/10 Founder M&A Strategies and the Role of VCs Harry cites investor advice from Rishi Gaug regarding startup M&A target pipelines and asks about VC involvement during deals. Chad gently reframes the advice around business development partnerships while highlighting the value of un-emotional VC advisors.23:08–25:00 · Guest disagreement 0/10 Quickfire Round with Chad Richard Harry conducts a standard quickfire round covering books, blogs, and day-to-day challenges, which Chad answers cooperatively and succinctly.2:52–7:02 · Harry pushing back 1/10 Chad Richard's Early Background and Entry into Startups Harry asks Chad about his background and entry into tech M&A at Apple, prompting a detailed discussion on product-driven M&A versus revenue acquisition. Harry demonstrates solid host context by contrasting Apple's methodology with traditional financial acquisition models.7:02–9:07 · Harry pushing back 0/10 Building the Deal Pipeline through Partnerships at Yelp Harry introduces the topic of Yelp's deal pipeline, and Chad details how combining business development partnerships with corporate development replaces guesswork with real operational metrics.9:07–11:42 · Harry pushing back 1/10 Strategic Investments, Partnerships, and Founder Alignment Harry raises perceptive questions regarding founder anxieties around strategic corporate investments and exclusivity risks. Chad validates Harry's point, offering nuanced advice on timing strategic investments in later funding rounds.11:42–14:30 · Harry pushing back 2/10 Yelp's Internal M&A Decision-Making Workflow Harry presses Chad for granular details on Yelp's internal decision-making process from corporate development approval to sign-off, introducing the term 'slow motion M&A'. Chad adopts the framing and breaks down internal stakeholder alignment.14:31–19:45 · Harry pushing back 1/10 Valuation Challenges, Retaining Talent, and Cash vs. Stock Structure Harry demonstrates strong financial acumen by asking how deals are valued without P/E ratios and contrasting public acquirer stock deals with private mega-unicorns like Uber and Airbnb. Chad explicitly commends Harry for zeroing in on one of the hardest aspects of M&A.19:45–23:08 · Harry pushing back 1/10 Founder M&A Strategies and the Role of VCs Harry cites investor advice from Rishi Gaug regarding startup M&A target pipelines and asks about VC involvement during deals. Chad gently reframes the advice around business development partnerships while highlighting the value of un-emotional VC advisors.23:08–25:00 · Harry pushing back 0/10 Quickfire Round with Chad Richard Harry conducts a standard quickfire round covering books, blogs, and day-to-day challenges, which Chad answers cooperatively and succinctly.

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

0:00 · Harry 98.3% · guest 1.7%0:00 · Harry 98.3% · guest 1.7%3:00 · Harry 16.7% · guest 83.3%3:00 · Harry 16.7% · guest 83.3%6:00 · Harry 12.1% · guest 87.9%6:00 · Harry 12.1% · guest 87.9%9:00 · Harry 15.4% · guest 84.6%9:00 · Harry 15.4% · guest 84.6%12:00 · Harry 19.5% · guest 80.5%12:00 · Harry 19.5% · guest 80.5%15:00 · Harry 18.3% · guest 81.7%15:00 · Harry 18.3% · guest 81.7%18:00 · Harry 9.2% · guest 90.8%18:00 · Harry 9.2% · guest 90.8%21:00 · Harry 22.4% · guest 77.6%21:00 · Harry 22.4% · guest 77.6%24:00 · Harry 71.9% · guest 28.1%24:00 · Harry 71.9% · guest 28.1%
Sharpest disagreement ▶ 20:02 Chad reframes Rishi Gaug's pipeline strategy

Chad politely offers a counter-perspective to investor Rishi Gaug's quote cited by Harry, reframing the idea of building an M&A target pipeline into cultivating operational business partnerships.

 Hardest push from Harry ▶ 12:37 Harry presses for internal corp dev approval details

Harry interrupts to redirect the narrative back to Yelp's precise internal sign-off flow after Chad gives a higher-level answer about investment philosophy.

 Biggest teaching moment ▶ 17:45 Chad explains liquidity and valuation risk profiles

Chad breaks down the financial and psychological differences for founders taking public stock with instant liquidity versus highly valued private stock subject to market valuation swings.

 Harry holds his own ▶ 17:23 Harry contrasts public incumbents against mega-private unicorns

Harry shows strong subject matter knowledge by bringing up specific industry examples like Airbnb and Uber to contrast private mega-balance sheet acquisitions with public market dynamics.
the scores for every segment, with the reasoning behind each
ChapterTopicHarry as informed peerGuest teachingGuest disagreementHarry pushing backWhy
Chad Richard's Early Background and Entry into Startups 3411 Harry asks Chad about his background and entry into tech M&A at Apple, prompting a detailed discussion on product-driven M&A versus revenue acquisition. Harry demonstrates solid host context by contrasting Apple's methodology with traditional financial acquisition models.
Building the Deal Pipeline through Partnerships at Yelp 2300 Harry introduces the topic of Yelp's deal pipeline, and Chad details how combining business development partnerships with corporate development replaces guesswork with real operational metrics.
Strategic Investments, Partnerships, and Founder Alignment 4311 Harry raises perceptive questions regarding founder anxieties around strategic corporate investments and exclusivity risks. Chad validates Harry's point, offering nuanced advice on timing strategic investments in later funding rounds.
Yelp's Internal M&A Decision-Making Workflow 4202 Harry presses Chad for granular details on Yelp's internal decision-making process from corporate development approval to sign-off, introducing the term 'slow motion M&A'. Chad adopts the framing and breaks down internal stakeholder alignment.
Valuation Challenges, Retaining Talent, and Cash vs. Stock Structure 6411 Harry demonstrates strong financial acumen by asking how deals are valued without P/E ratios and contrasting public acquirer stock deals with private mega-unicorns like Uber and Airbnb. Chad explicitly commends Harry for zeroing in on one of the hardest aspects of M&A.
Founder M&A Strategies and the Role of VCs 5311 Harry cites investor advice from Rishi Gaug regarding startup M&A target pipelines and asks about VC involvement during deals. Chad gently reframes the advice around business development partnerships while highlighting the value of un-emotional VC advisors.
Quickfire Round with Chad Richard 2100 Harry conducts a standard quickfire round covering books, blogs, and day-to-day challenges, which Chad answers cooperatively and succinctly.

Statements from this episode (9)

Assertion Supported
Steve Jobs Had Product Leaders Run M&A to Prevent Deal Quotas
“Steve Jobs, who was still running the company at the time, had a pretty strong philosophy that if you have an M&A team who's being judged on how many deals a year they bring in, then you're going to be doing M&A just to do M&A. So what he did is he had the pro…”
Chad Richard Nov 22, 2017 ▶ 4:32
Assertion Partly supported
Apple's M&A Strategy Focused Entirely on Talent Over Revenue Streams
“We were very much focused on finding great teams. It was never about acquiring revenue streams. It was finding great people who wanted to come to Cupertino.”
Chad Richard Nov 22, 2017 ▶ 5:13
Insight
Partnerships Replace Speculative M&A Valuation Models With Actual Operational Data
“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…”
Chad Richard Nov 22, 2017 ▶ 8:16
Insight
Founders Should Only Take Strategic Corporate Investment in Later Rounds
“So as entrepreneurs are considering strategic investment, I think it's something that they should do in later rounds of financing, and they should only do it if they know the company pretty well and feel very comfortable that that's where they would like to be…”
Chad Richard Nov 22, 2017 ▶ 11:13
Insight
Strategic Minority Investments Function as Slow-Motion M&A
“I view it as what I call slow motion M&A, and the idea is you're acquiring a piece of the company during the investment, and during that process, you're doing the normal diligence that you would if you were going ahead and making an investment.”
Chad Richard Nov 22, 2017 ▶ 11:52
Disclosure
Yelp Only Makes Venture Investments in Startups It Intends to Acquire
“We wouldn't have made the investment had we not been interested in a Acquiring the company, but this really allowed us to test a lot of our theories related to the product experience and also just integration of the technologies and basically making sure every…”
Chad Richard Nov 22, 2017 ▶ 12:18
Insight
Acquired Team Enthusiasm for an Acquirer Only Diminishes After Closing
“If you don't genuinely see that alignment and enthusiasm, it won't be as great as it is before you write them the check, right? So you have to make sure that it's Truly and sincerely there, because it will probably only diminish.”
Chad Richard Nov 22, 2017 ▶ 15:45
Insight
Running Three to Five Concurrent Acquisition Dialogues Yields Better Outcomes
“You can get three to five meaningful dialogues going on at the same time, and that's almost certain to lead to a better outcome for you and your investors than just having the dialogue with one company.”
Chad Richard Nov 22, 2017 ▶ 21:21
Insight
Unattached VCs Build Credibility and Value During M&A Negotiations
“If the VCs can kind of step in as a more seasoned, maybe less emotionally attached person, Player at the table to really help get to those truths and understanding earlier, it can be really beneficial for the shareholders of the company that's being acquired b…”
Chad Richard Nov 22, 2017 ▶ 22:33
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 1,200 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more