Jan 15, 2018 · 30m · 20vc
20VC: LinkedIn's Head of Corp Dev on Why and When Startups Should Start Relationship Building With Corp Dev, What The Structure of M&A Traditionally Looks Like & How To Mitigate The Biggest Risk of M&A, Integration Risk
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In this episode of The 20 Minute VC, host Harry Stebbings interviews Emily Choi, Head of Corporate Development at LinkedIn, to explore the mechanics of tech M&A, long-term relationship building between founders and corporate buyers, and strategies for mitigating post-merger integration risk. Choi offers tactical advice on navigating deal execution, internal governance frameworks like RAPID, and aligning strategic goals for startup 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 32.6% of the talking time here. How this is scored →
Harry as informed peer 3.5 Guest teaching 3.5 Guest disagreement 0.5 Harry pushing back 1.2
speaking balance: gold is Harry, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 17:41 Rejecting Paul Graham's thesis on M&A pricing
Emilie politely but firmly rejects the premise quoted by Harry that corporate development teams only focus on buying cheaply, arguing instead that strategic company fit drastically outweighs price.
Hardest push from Harry ▶ 17:20 Challenging corp dev pricing motivationsHarry directly confronts Emilie with Paul Graham's cynical quote that corp dev performance is measured solely by how cheaply they can acquire startups.
Biggest teaching moment ▶ 17:41 Strategic value versus acquisition priceEmilie educates the host on how top-tier M&A operates, demonstrating through examples like Instagram, Android, and YouTube that over-focusing on low valuation leads to failed deals.
Harry holds his own ▶ 4:59 Setting up macro context with explicit exit statsHarry shows strong subject mastery by presenting concrete stats from 2016 regarding VC-backed exits and M&A breakdowns to ground the macro conversation.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Harry as informed peer | Guest teaching | Guest disagreement | Harry pushing back | Why |
|---|---|---|---|---|---|---|
| Emily Choi's Career Journey and Early Corp Dev Learnings | 2 | 3 | 0 | 0 | Harry introduces Emilie warmly and asks standard interview questions about her career trajectory and lessons learned over seven years at LinkedIn. Emilie provides a structured overview of her career and outlines a 'crawl, walk, run' approach to building corporate development teams. | |
| Macro Trends in Tech M&A, Private Equity, and Strategic Investing | 5 | 3 | 0 | 1 | Harry demonstrates strong preparation by citing specific 2016 stats on VC-backed exits and M&A totals to prompt a discussion on tech slowdowns. Emilie explains why M&A has slowed, pointing to tech giants copying products, talent dynamics, and frothy valuations, while offering balanced insights on private equity and strategic investments. | |
| Relationship Building Between Startups and Corp Dev Teams | 4 | 4 | 1 | 2 | Harry uses Paul Graham's stance on corporate development to challenge Emilie on when startups should engage with buyers. Emilie constructively reframes Paul Graham's advice using quotes from Mark Suster and Reed Hoffman to advocate for long-term relationship building. | |
| M&A Process Execution, Internal Approvals, and Valuation Principles | 4 | 5 | 2 | 3 | Harry quotes Paul Graham's provocative view that corporate development teams are judged solely on how cheaply they buy startups. Emilie directly disagrees with the premise, explaining that buying the right strategic fit matters far more than driving down price, citing transformative acquisitions like Android and YouTube. | |
| Mitigating Integration Risk and Defining Acquisition Success | 4 | 4 | 0 | 1 | Harry references Matt Switzer's insights on integration risk to ask about mitigating post-merger failures and assessing success metrics. Emilie outlines LinkedIn's barbell approach and explains the key operational differences between integrating consumer and enterprise acquisitions. | |
| Quickfire Round with Emily Choi | 2 | 2 | 0 | 0 | Harry conducts a brisk quickfire round touching on deal transparency, false urgency, reading habits, and LinkedIn's recent Heighten acquisition. Emilie shares practical advice for founders on maintaining credibility during deal talks. |
Statements from this episode (13)
Corp dev teams should use a crawl-walk-run framework mapped to strategy
“I think anybody who's building out a corp dev practice should think about kind of a crawl, walk, run approach. So figure out What are the nuances of the company and the company's strategy, and how can you map an M&A strategy to that?”
Choi: Tech giants copy startup features to avoid acquisition hassles and regulation
“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.”
Choi: PE cost-cutting in tech buyouts degrades R&D and product quality
“My concern is that the focus on cost cutting can eat into R&D investment, which can translate into subpar products over time.”
Choi: Strategic corporate investments effectively build ecosystems around core products
“On the strategic investment side, I used to be more bearish on that area. I see it as a great way to seed an ecosystem around your products and services and have some skin in the game, so I'm a big fan of that.”
Choi: Startups should build ongoing corp dev relationships, not transactional contacts
“I'm a big fan of Mark Souster's line about, it's about lines, not dots. In other words, it's about long-term relationship and a series of dots, not just one transactional conversation. So don't just come to us when there's a transaction going on. Knowing the c…”
Choi: LinkedIn Corp Dev prefers starting startup relationships at seed stage
“In many cases, it's at seed level. And again, it doesn't mean that there has to be anything transactional about the relationship, but it's good for us to start interacting at that stage if they're in a space that we're interested in.”
Choi: Creating False Urgency in M&A Negotiations Destroys Startup Credibility
“One of the things that I would recommend to founders is to be careful about putting false sense of timelines on a deal. So for example, it often happens that somebody will call and say, listen, we're going to get a term sheet from three other companies by the …”
Choi: LinkedIn Uses a RAPID Framework for Internal M&A Approvals
“We at LinkedIn have implemented something called a rapid process. There is one usually executive level sponsor who will, on R&D usually, who will recommend this acquisition. The other R&D person, for example, the head of engineering for that particular group, …”
Choi: In Tech M&A, Acquiring the Right Company Matters More Than Price
“I truly believe that the most important thing is buying the right company and not getting the right deal, and I think that there's a lot of different examples of companies that have said that they're going to go after the potentially weaker asset for a lower p…”
Choi: Top consumer acquisitions boost target R&D, marketing spend 30-40%
“What's really interesting on the consumer side, what really stands out from the most successful ones is that they were really left alone. The acquiring company typically provided them with a bunch of backend help and Legal and other GNA services, but they usua…”
Choi: LinkedIn had three acquired founders leading main business lines
“At one point, for example, at LinkedIn, we had three founders running the three key business lines at the company”