The Exchanges

Q Can I ask, you said no deals done until it's done there. Completely agree. In terms of the internal decision making, what does that look like for you, and what is the kind of series of checks that you have to go through to get that decision granted?

A Sure. This is true for Square, but it's true at Yahoo, and it's true at Google, too. The first check is always that there's buy-in from sort of product champion, and so that is the first thing we always do, and that's part of, I think, the process of talking to the product Teams and collecting information, but when we find a target that's interesting, the very first thing we need is someone who's passionate about it at the company, because corp dev doesn't do deals, product does, and so that's the first thing we need. I think the next step then is usually to do some level of work, understand the company more so that we can pull together a deal memo, and then we talk to our executives about it. Both at Yahoo and at Square, I've tried to make sure that we pull that executive conversation up very early in the process before we issue a written offer so that we make sure that we don't have Too many places down the line where Square has to change its mind, basically. And so we have that fulsome conversation with our executives before we issue a written term sheet. And so after that, once we issue a written term sheet, we'll negotiate the term sheet and the definitive agreements, and we'll check back in with our executives one more time before we sign a binding agreement and close. By and large, and this isn't necessarily true for Square, but across Silicon Valley, once that term shee…

AI assessment note: “The first check is always that there's buy-in from sort of product champion”

Q Can I ask, you said no deals done until it's done there. Completely agree. In terms of the internal decision making, what does that look like for you, and what is the kind of series of checks that you have to go through to get that decision granted?

A Sure. This is true for Square, but it's true at Yahoo, and it's true at Google, too. The first check is always that there's buy-in from sort of product champion, and so that is the first thing we always do, and that's part of, I think, the process of talking to the product Teams and collecting information, but when we find a target that's interesting, the very first thing we need is someone who's passionate about it at the company, because corp dev doesn't do deals, product does, and so that's the first thing we need. I think the next step then is usually to do some level of work, understand the company more so that we can pull together a deal memo, and then we talk to our executives about it. Both at Yahoo and at Square, I've tried to make sure that we pull that executive conversation up very early in the process before we issue a written offer so that we make sure that we don't have Too many places down the line where Square has to change its mind, basically. And so we have that fulsome conversation with our executives before we issue a written term sheet. And so after that, once we issue a written term sheet, we'll negotiate the term sheet and the definitive agreements, and we'll check back in with our executives one more time before we sign a binding agreement and close. By and large, and this isn't necessarily true for Square, but across Silicon Valley, once that term shee…

AI assessment note: “The first check is always that there's buy-in from sort of product champion”

Q We mentioned kind of what it takes to get to the M&A stage there. In terms of post M&A, we always hear from the likes of Matt and Emily that integration is the biggest risk. I'd love to hear, how do you measure the success of an acquisition and the subsequent integration? Are there kind of metrics and benchmarks that you'd like to monitor to determine whether it was successful?

A For sure. It's a little different across all different types of deals, but what we try and do is we try and keep ourselves honest. And tie success back to our original deal memo. And so, you know, we go into every deal with a thesis, and the thesis could be, we want more talent. The thesis could be, this piece of technology is really important. Or the thesis could be, this adds to Square's financial metrics. What we try and do is, when we look back at those deals, we try to do so on a regular basis, is, if it was a talent deal, are the people still here? Are they contributing? Are they an important part of Square? If it was a technology deal, are we using the technology in the way we expect it to? Did it accelerate the roadmap? Did it give us the functionality we expect it to? And if it's sort of a whole company deal or financially driven, then we're measuring it against a model that we had put together at the time of the deal and looking at it and saying, you know, are the financial results what we expected them to be? I think there's a fourth bucket, which is sometimes there's unexpected benefits from deals. And like, we were not afraid to sort of say, you know, we didn't see that coming, but that's a wonderful outcome. Like, let's add that to what's successful in the same way that there's sometimes there's unexpected risks that come up. And we look at those two I think the i…

AI assessment note: “tie success back to our original deal memo”

Q had 513 VC-backed exits, 499 were M&A, so annoying it wasn't one more just to round that up. But we had Emily Choi from LinkedIn on the show the other day, and she mentioned that it was potentially a slowdown in tech M&A activity. I'd love to hear, when you compare back to the previous years that you've seen in the market, How will you assess the current landscape today?

A So I think there's a couple of factors going into that. First of all, I think it's hard to tell because there's obviously those numbers that you just quoted, but a lot of, especially the big tech acquirers are pretty secretive about the M&A they do, and they're so big now that they don't have to break out their acquisitions and their public filings. So you could go a year or two sometimes without seeing all the deals that a Google or Facebook or an Apple's done. But that said, I do think there's a couple of factors going on. So I think I agree with Emily in one sense, which is that it does feel Feel like the large tech acquirers or the big five have at least slowed down the pace, like a number of acquisitions they're doing. Obviously you have Amazon doing something giant like Whole Foods, but it feels like the deals that are sort of the bread and butter of the mid-level exit, I would call. So sort of like things under two hundred million dollars. It feels like those companies are doing fewer of those deals. At least they're announcing fewer of them in any case. And those five companies drive a ton of the market. That said, I do feel like Over the last year or two, what might be a factor to bolster up that if those companies look for bigger deals because it's harder to move the needle is that there's the, for lack of a better term, there's all the unicorns and companies like Squ…

AI assessment note: “the large tech acquirers or the big five have at least slowed down the pace”

Q one of the 1200 GPs has recommended that Square buy the 20 minute VC. It's exciting times here, and we're going to progress through pipe. Paul Graham said that it's a grueling process. I'd love to hear your thoughts on whether this is a fair assessment of the M&A process once the targets have been identified. How would you respond to that? And how do you think about the process?

A So that is somewhere where I try and be upfront with founders that it can be difficult. It's not necessarily easy, but it's not intentionally difficult. It's not designed as a meat grinder to sort of grind down the will of startups. I think the reality is, is that an acquisition is a big deal, even smaller Acquisitions is a big deal for any company. So when you're bringing a company in, there's a lot that you need to know about what you're bringing in, both from a risk allocation and risk management piece, but also from mostly from an integration piece. How do you make sure that when the company is brought into the acquirer, do you have a real chance for success? But as a result, there will be a lot more people on my side of the table than on your side of the table as a founder. And that just that by itself, I think is what creates that sort of quote unquote grueling environment that Paul is talking about. Because I'm going to roll out, even at a small company in a square, somewhere between six and 10 people who are going to be involved in a deal process, and they're all going to be asking the CEO founder for stuff. And so it can be pretty overwhelming. I think my job as the corporate development lead on the deal is to make sure that I manage that fire hose in a way that it doesn't completely overwhelm the company, but still moves us quickly towards the, towards the end of the …

AI assessment note: “I think is what creates that sort of quote unquote grueling environment that Paul is talking about”

Q I could not agree. I mean, what an opportunity. I'm very interested, though, before we dive in today, you said there about being mostly on the buy side prior to Andreessen. Where would you stand on the thesis that companies are bought and not sold, having sat on both sides of the table, both with Andreessen and with Yahoo, Google, and now Square?

A Yeah, for sure. 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, let me, like, dig in on that a little bit. So, if your Instagram Like you sure you're bought, not sold. So if you're a no brainer for a company like Facebook, or if you're WhatsApp, I think Facebook's done quite a few deals where they came in and bought someone out just because they had so much success and they were so strong. And I think that's a fine piece of advice. If that's the business you're sitting on, I think the reality is much more nuanced. I think if you look at the vast majority of M and a deals that happen out there, there was work done by the company, by the company's investors that Long before any acquisition even came into anyone's mind. And that work really is working on building the relationship with potential acquirers, building awareness in that community of acquirers of your company and what it does and what you might be able to do for a potential acquirer. 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 that way.

AI assessment note: “I hate that saying, because I think it's a trite way of describing”

Q Can I ask, what time frame was this?

A So I was there from 2010 to 2013. So just an incredible amount of M&A activity and just a huge experience in the tech world. But the one thing I did realize while I was doing that was that I enjoyed the business piece of the acquisition world a lot more than I did the legal part. And so I had an opportunity when one of the people I worked with a lot at Google was Marissa. And when she went to Yahoo to be the CEO, I had an opportunity to move over to the corporate development side of Yahoo. Another great experience at Yahoo. We did a bunch of deals in the two years I was there. I think did a lot of interesting things for the company, but then I had an opportunity then to go and work at Andreessen Horowitz on their operating team and their corporate development group. And it was such a great opportunity for me because I had done so much. I, what I would call buy side MNA at Google and Yahoo, that it was a great opportunity to go and work with both the venture capital firm and the founders to see what their viewpoint on the MNA sort of world was. It was a great experience. I think it really rounded out my sort of view of the world. I then did what I think most corp dev people want to do, and I took a jump at going into a more operating-focused role. I went to work at a company called STX, which is a movie studio down in LA. It was hard on my family with all the travel, so I decide…

AI assessment note: “So I was there from 2010 to 2013.”

Q You said about kind of M&A being the primary exit route. I'm really intrigued then. How would you respond to Paul Graham's fantastically titled essay, Don't Talk to Corp Dev? What are your thoughts on this, and maybe when and if the right time to have conversations with corp dev teams is, given that now it is the primary exit route?

A I think Paul is a very, very smart guy, and I think that his advice is, In the article is much more nuanced than the title of his article. And so I would say first, I disagree with the premise that the title of the blog post gives, which is that you should never talk to corporate development. I think the second premise, which is you shouldn't do that because you should be focused on building your company is a great sentiment. And so I think the balance that companies have to find in between those two factors is back to my previous statement about companies being bought, not sold, is that building a relationship with Companies that may someday be a potential acquirer is a really important part of making that option a reality. Corporate development teams across the Silicon Valley, including at Facebook and Google, are small compared to the opportunity set that they're evaluating. There's just so many companies out there all the time to evaluate, and if you're even at Square, you know, we have a broad set of product lines, and that means that the universe of startups that could be interesting to us Is massive. It runs the gamut from payments all the way through lending and consumer finance. And so we're always overwhelmed. Every corporate dev team is always overwhelmed by the number of startups that there are out there. And so it behooves you as a founder or CEO of a tech company …

AI assessment note: “disagree with the premise that the title of the blog post gives”

Q Often it's the investors that introduce the companies to the corp dev teams. I'm intrigued. How do you like to really build the relationship? What does that process and flow look like to you in an ideal world?

A So, I mean, I think there's a high level where I love to spend time and talk to the venture capital community, not necessarily to go and be like, what part of your portfolio can I buy? Uh, but more just because what I saw at Andreessen is that you really are seeing the pulse and flow of what is coming and what the trends are. And so for me, it's absolutely invaluable to have like a good back and forth relationship with VCs on what are they seeing? What's interesting? What's real? What's not real? And I think that that is the first level of value. And I'd like to think that I can give the point of view of a large corporate and sort of what we're seeing in the marketplace and what we think is going to make it up to our size. And I think that there's a great back and forth there, because I think that when you create that dialogue and they understand what we're doing and what we're looking for, and I understand the trends they're seeing, that's when you can actually come up and synthesize an idea that eventually could turn into an acquisition. And it's much better than sort of Here's my portfolio, and here's the two that are relevant to your space, and here's whether you could buy them or not. And I think most VCs know that too, and most of my interactions aren't like that on the venture capital side. And so I think that's the first layer of how, you know, you have a good interacti…

AI assessment note: “when you create that dialogue and they understand what we're doing”

Q had 513 VC-backed exits, 499 were M&A, so annoying it wasn't one more just to round that up. But we had Emily Choi from LinkedIn on the show the other day, and she mentioned that it was potentially a slowdown in tech M&A activity. I'd love to hear, when you compare back to the previous years that you've seen in the market, How will you assess the current landscape today?

A So I think there's a couple of factors going into that. First of all, I think it's hard to tell because there's obviously those numbers that you just quoted, but a lot of, especially the big tech acquirers are pretty secretive about the M&A they do, and they're so big now that they don't have to break out their acquisitions and their public filings. So you could go a year or two sometimes without seeing all the deals that a Google or Facebook or an Apple's done. But that said, I do think there's a couple of factors going on. So I think I agree with Emily in one sense, which is that it does feel Feel like the large tech acquirers or the big five have at least slowed down the pace, like a number of acquisitions they're doing. Obviously you have Amazon doing something giant like Whole Foods, but it feels like the deals that are sort of the bread and butter of the mid-level exit, I would call. So sort of like things under two hundred million dollars. It feels like those companies are doing fewer of those deals. At least they're announcing fewer of them in any case. And those five companies drive a ton of the market. That said, I do feel like Over the last year or two, what might be a factor to bolster up that if those companies look for bigger deals because it's harder to move the needle is that there's the, for lack of a better term, there's all the unicorns and companies like Squ…

AI assessment note: “I agree with Emily in one sense, which is that it does feel”

Q What one thing on the other side of the table do you wish that startups maybe knew more with regards to the M&A process?

A Sure. I think the most important thing is, is that CorpDev wants to be your advocate within the company, not just for an M&A deal. Like, we spend our days talking to VCs and talking to startups, and we've self-selected for this job because we love entrepreneurs, and we love the entrepreneurial activity that Silicon Valley represents. And so, don't be afraid to To engage with us, even if you're not interested in selling the company, if you, if you want an introduction to someone at square, if you want to talk to our business development team, if you think that there's a product manager that you could spend an hour with and both of you could get smarter, that's what we love to do. We love to bring in that outside entrepreneurial spirit into square. And we're happy to bring some of our like at scale working knowledge to startups as well. It's not just about buying or selling companies. It's really about being engaged in the ecosystem generally.

AI assessment note: “CorpDev wants to be your advocate within the company, not just for an M&A deal.”

Q I could not agree. I mean, what an opportunity. I'm very interested, though, before we dive in today, you said there about being mostly on the buy side prior to Andreessen. Where would you stand on the thesis that companies are bought and not sold, having sat on both sides of the table, both with Andreessen and with Yahoo, Google, and now Square?

A Yeah, for sure. 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, let me, like, dig in on that a little bit. So, if your Instagram Like you sure you're bought, not sold. So if you're a no brainer for a company like Facebook, or if you're WhatsApp, I think Facebook's done quite a few deals where they came in and bought someone out just because they had so much success and they were so strong. And I think that's a fine piece of advice. If that's the business you're sitting on, I think the reality is much more nuanced. I think if you look at the vast majority of M and a deals that happen out there, there was work done by the company, by the company's investors that Long before any acquisition even came into anyone's mind. And that work really is working on building the relationship with potential acquirers, building awareness in that community of acquirers of your company and what it does and what you might be able to do for a potential acquirer. 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 that way.

AI assessment note: “I hate that saying, because I think it's a trite way”

Q You said that about the sheer number of size. I'm really intrigued. How do you operationalize the tracking of such a busy and proliferated landscape?

A So we approach it from two different ways at Square. I think the first thing we do is we narrow the lens by really digging in and spending a lot of time with our product teams. And understanding what's important to them, what's on their roadmap, where we think we can help accelerate that. And that helps us narrow the lens a little bit to say, all right, like we've talked to this team and it's not everything they're doing. It's a couple of spaces within what they're doing. And then we can take that and bring it out into the marketplace. And so that's sort of what I would call the bottoms up approach to how we narrow things down. And then I think there's a tops down approach, which is to make sure that we're keeping an eye on and evaluating new business opportunities for square. And that's a little more freeform. I think we spend a lot of time talking to venture capital firms. We spend a lot of time talking to influential founders. We spend a lot of time reading blogs and news and just trying to understand what the trends are and what the forces are that affect Square, and so that we can identify and see new and interesting areas that might be growth opportunities for the company.

AI assessment note: “So we approach it from two different ways at Square.”

Q So you mentioned the role of VCs there. Naturally, as a VC, I would always advocate for the benefits of having influential VCs who can bring such Contacts and relationships. I'm intrigued. How do you think about the role of VCs in M&A, and what do you really see as those that do it well? What do they do so well?

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 on. It's an emotional time period. And I think that your best investors can come along and provide you not just great advice, but just a steadying hand that everything's going fine and give founders a backup because by and large founders don't have a ton of experience with M&A. And so VCs will, especially VCs who sort of boards will have seen this a lot more. I think the challenging part that can come with VCs sometimes is they need to recognize the limits of their experience as well. The only times I've ever run into trouble with With investors is when they, based on a small sample size of M&A deals, are providing founders with advice that can be, I think, sometimes counter to their interests. But to be honest, that happens pretty rarely. My experience, by and large, is that companies that have good investors get great advice and help during the M&A process.

AI assessment note: “act both as a balancing and a calming factor for founders”

Q one of the 1200 GPs has recommended that Square buy the 20 minute VC. It's exciting times here, and we're going to progress through pipe. Paul Graham said that it's a grueling process. I'd love to hear your thoughts on whether this is a fair assessment of the M&A process once the targets have been identified. How would you respond to that? And how do you think about the process?

A So that is somewhere where I try and be upfront with founders that it can be difficult. It's not necessarily easy, but it's not intentionally difficult. It's not designed as a meat grinder to sort of grind down the will of startups. I think the reality is, is that an acquisition is a big deal, even smaller Acquisitions is a big deal for any company. So when you're bringing a company in, there's a lot that you need to know about what you're bringing in, both from a risk allocation and risk management piece, but also from mostly from an integration piece. How do you make sure that when the company is brought into the acquirer, do you have a real chance for success? But as a result, there will be a lot more people on my side of the table than on your side of the table as a founder. And that just that by itself, I think is what creates that sort of quote unquote grueling environment that Paul is talking about. Because I'm going to roll out, even at a small company in a square, somewhere between six and 10 people who are going to be involved in a deal process, and they're all going to be asking the CEO founder for stuff. And so it can be pretty overwhelming. I think my job as the corporate development lead on the deal is to make sure that I manage that fire hose in a way that it doesn't completely overwhelm the company, but still moves us quickly towards the, towards the end of the …

AI assessment note: “I try and be upfront with founders that it can be difficult.”

Q We mentioned kind of what it takes to get to the M&A stage there. In terms of post M&A, we always hear from the likes of Matt and Emily that integration is the biggest risk. I'd love to hear, how do you measure the success of an acquisition and the subsequent integration? Are there kind of metrics and benchmarks that you'd like to monitor to determine whether it was successful?

A For sure. It's a little different across all different types of deals, but what we try and do is we try and keep ourselves honest. And tie success back to our original deal memo. And so, you know, we go into every deal with a thesis, and the thesis could be, we want more talent. The thesis could be, this piece of technology is really important. Or the thesis could be, this adds to Square's financial metrics. What we try and do is, when we look back at those deals, we try to do so on a regular basis, is, if it was a talent deal, are the people still here? Are they contributing? Are they an important part of Square? If it was a technology deal, are we using the technology in the way we expect it to? Did it accelerate the roadmap? Did it give us the functionality we expect it to? And if it's sort of a whole company deal or financially driven, then we're measuring it against a model that we had put together at the time of the deal and looking at it and saying, you know, are the financial results what we expected them to be? I think there's a fourth bucket, which is sometimes there's unexpected benefits from deals. And like, we were not afraid to sort of say, you know, we didn't see that coming, but that's a wonderful outcome. Like, let's add that to what's successful in the same way that there's sometimes there's unexpected risks that come up. And we look at those two I think the i…

AI assessment note: “tie success back to our original deal memo”

Q You said about kind of M&A being the primary exit route. I'm really intrigued then. How would you respond to Paul Graham's fantastically titled essay, Don't Talk to Corp Dev? What are your thoughts on this, and maybe when and if the right time to have conversations with corp dev teams is, given that now it is the primary exit route?

A I think Paul is a very, very smart guy, and I think that his advice is, In the article is much more nuanced than the title of his article. And so I would say first, I disagree with the premise that the title of the blog post gives, which is that you should never talk to corporate development. I think the second premise, which is you shouldn't do that because you should be focused on building your company is a great sentiment. And so I think the balance that companies have to find in between those two factors is back to my previous statement about companies being bought, not sold, is that building a relationship with Companies that may someday be a potential acquirer is a really important part of making that option a reality. Corporate development teams across the Silicon Valley, including at Facebook and Google, are small compared to the opportunity set that they're evaluating. There's just so many companies out there all the time to evaluate, and if you're even at Square, you know, we have a broad set of product lines, and that means that the universe of startups that could be interesting to us Is massive. It runs the gamut from payments all the way through lending and consumer finance. And so we're always overwhelmed. Every corporate dev team is always overwhelmed by the number of startups that there are out there. And so it behooves you as a founder or CEO of a tech company …

AI assessment note: “I disagree with the premise that the title of the blog post gives”

Q So you mentioned the role of VCs there. Naturally, as a VC, I would always advocate for the benefits of having influential VCs who can bring such Contacts and relationships. I'm intrigued. How do you think about the role of VCs in M&A, and what do you really see as those that do it well? What do they do so well?

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 on. It's an emotional time period. And I think that your best investors can come along and provide you not just great advice, but just a steadying hand that everything's going fine and give founders a backup because by and large founders don't have a ton of experience with M&A. And so VCs will, especially VCs who sort of boards will have seen this a lot more. I think the challenging part that can come with VCs sometimes is they need to recognize the limits of their experience as well. The only times I've ever run into trouble with With investors is when they, based on a small sample size of M&A deals, are providing founders with advice that can be, I think, sometimes counter to their interests. But to be honest, that happens pretty rarely. My experience, by and large, is that companies that have good investors get great advice and help during the M&A process.

AI assessment note: “best VCs, especially in the M&A process, can act both as a balancing”

Q So what do you know now that you wish you'd known when you started?

A I think the thing that, that I do know now that I wish I'd known was how emotional the M&A process is for founders and CEOs, especially founders. Uh, when I came from New York, when I was a lawyer, like the, the M&A process in big corporate America is not an emotional exercise. Any emotion is really sort of manufactured as part of negotiation. People storm out of conference rooms and things all the time, but it's not the deal. Whereas like that's, Fundamentally different in Silicon Valley or in tech M&A generally, where you're dealing with a founder who may not have paid themselves, has worked a hundred hours a week for the last four years. You need to be very, very cognizant of that fact across all parts of the engagement process. I became very aware of it in my time at Andreessen, and I really tried to keep that in mind and make sure that members of my team keep that in mind when they're engaging with founders. This is not just a company. It's not just a business deal. It's much, much more than that to those folks.

AI assessment note: “the thing that I do know now that I wish I'd known was”

Q Can I ask, is it not also challenging for you from a pricing perspective with so many different acquisitive buyers in the market from PE to strategics to corporates to the traditional tech M&A, does it not also bolster prices?

A So I think that pricing tech companies in particular is incredibly difficult, especially I've spent most of my career in consumer internet. You're buying a lot of companies where you're looking at talent and technology are the main drivers, and so you can't sort of build a model directly related to the company's existing revenue or profit and be a hundred percent sure on price. I haven't personally noticed prices going up. The factors I just discussed are certainly factors with new entrants in the market and driving price up. One factor that I think has moderated prices a little bit is that M&A has become the absolute primary method of exits. You've seen far fewer IPOs over the last five years. And given that that reduced itself as an option, an IPO is often your primary competition when you're doing an M&A deal, especially for a significant and large company, the company will be looking at an IPO as the option to an M&A deal. And that's when pricing becomes difficult because you're sort of competing with the public markets. So I haven't seen a ton of price increase, but I do think that's because in my view, even though you've seen new entrants into the market, There's been softening at the other end of the market from the Google, Facebook, Apple, Amazon end.

AI assessment note: “I haven't personally noticed prices going up.”

Q You said that about the sheer number of size. I'm really intrigued. How do you operationalize the tracking of such a busy and proliferated landscape?

A So we approach it from two different ways at Square. I think the first thing we do is we narrow the lens by really digging in and spending a lot of time with our product teams. And understanding what's important to them, what's on their roadmap, where we think we can help accelerate that. And that helps us narrow the lens a little bit to say, all right, like we've talked to this team and it's not everything they're doing. It's a couple of spaces within what they're doing. And then we can take that and bring it out into the marketplace. And so that's sort of what I would call the bottoms up approach to how we narrow things down. And then I think there's a tops down approach, which is to make sure that we're keeping an eye on and evaluating new business opportunities for square. And that's a little more freeform. I think we spend a lot of time talking to venture capital firms. We spend a lot of time talking to influential founders. We spend a lot of time reading blogs and news and just trying to understand what the trends are and what the forces are that affect Square, and so that we can identify and see new and interesting areas that might be growth opportunities for the company.

AI assessment note: “we approach it from two different ways at Square. I think the first thing”

Q Often it's the investors that introduce the companies to the corp dev teams. I'm intrigued. How do you like to really build the relationship? What does that process and flow look like to you in an ideal world?

A So, I mean, I think there's a high level where I love to spend time and talk to the venture capital community, not necessarily to go and be like, what part of your portfolio can I buy? Uh, but more just because what I saw at Andreessen is that you really are seeing the pulse and flow of what is coming and what the trends are. And so for me, it's absolutely invaluable to have like a good back and forth relationship with VCs on what are they seeing? What's interesting? What's real? What's not real? And I think that that is the first level of value. And I'd like to think that I can give the point of view of a large corporate and sort of what we're seeing in the marketplace and what we think is going to make it up to our size. And I think that there's a great back and forth there, because I think that when you create that dialogue and they understand what we're doing and what we're looking for, and I understand the trends they're seeing, that's when you can actually come up and synthesize an idea that eventually could turn into an acquisition. And it's much better than sort of Here's my portfolio, and here's the two that are relevant to your space, and here's whether you could buy them or not. And I think most VCs know that too, and most of my interactions aren't like that on the venture capital side. And so I think that's the first layer of how, you know, you have a good interacti…

AI assessment note: “it's absolutely invaluable to have like a good back and forth relationship with VCs”

Q Can I ask, is it not also challenging for you from a pricing perspective with so many different acquisitive buyers in the market from PE to strategics to corporates to the traditional tech M&A, does it not also bolster prices?

A So I think that pricing tech companies in particular is incredibly difficult, especially I've spent most of my career in consumer internet. You're buying a lot of companies where you're looking at talent and technology are the main drivers, and so you can't sort of build a model directly related to the company's existing revenue or profit and be a hundred percent sure on price. I haven't personally noticed prices going up. The factors I just discussed are certainly factors with new entrants in the market and driving price up. One factor that I think has moderated prices a little bit is that M&A has become the absolute primary method of exits. You've seen far fewer IPOs over the last five years. And given that that reduced itself as an option, an IPO is often your primary competition when you're doing an M&A deal, especially for a significant and large company, the company will be looking at an IPO as the option to an M&A deal. And that's when pricing becomes difficult because you're sort of competing with the public markets. So I haven't seen a ton of price increase, but I do think that's because in my view, even though you've seen new entrants into the market, There's been softening at the other end of the market from the Google, Facebook, Apple, Amazon end.

AI assessment note: “I haven't personally noticed prices going up.”

Q Can I ask, what time frame was this?

A So I was there from 2010 to 2013. So just an incredible amount of M&A activity and just a huge experience in the tech world. But the one thing I did realize while I was doing that was that I enjoyed the business piece of the acquisition world a lot more than I did the legal part. And so I had an opportunity when one of the people I worked with a lot at Google was Marissa. And when she went to Yahoo to be the CEO, I had an opportunity to move over to the corporate development side of Yahoo. Another great experience at Yahoo. We did a bunch of deals in the two years I was there. I think did a lot of interesting things for the company, but then I had an opportunity then to go and work at Andreessen Horowitz on their operating team and their corporate development group. And it was such a great opportunity for me because I had done so much. I, what I would call buy side MNA at Google and Yahoo, that it was a great opportunity to go and work with both the venture capital firm and the founders to see what their viewpoint on the MNA sort of world was. It was a great experience. I think it really rounded out my sort of view of the world. I then did what I think most corp dev people want to do, and I took a jump at going into a more operating-focused role. I went to work at a company called STX, which is a movie studio down in LA. It was hard on my family with all the travel, so I decide…

AI assessment note: “So I was there from 2010 to 2013.”