Insight certainty 4/5 debate potential 3/5

Refusing to engage corporate development closes doors to major enterprise growth

Rob Salvagno · 20VC: Inside The Acquisition Decision-Making Process at Cisco, How To Measure True Success in M&A Evaluation & Why By Not Speaking To Corp Dev Teams You Are Closing The Door On The Biggest Potential Accelerator To Your Business with Rob Salvagno, VP of Co · Dec 30, 2019 · at 14:10

Rob Salvagno, VP of Corporate Development at Cisco, responds to Paul Graham's advice that startups should avoid talking to corporate development teams.

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“If you ignore that because you don't see A Cisco as a potential partner or investor or potentially a future acquirer. What you're doing is you're really prematurely closing the door on what may be the biggest potential accelerator for your business.”

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Insight
Acquisition multiples matter less if the buyer can create post-merger value
“If you're in a position that you can see an opportunity to add value, the fair multiple is actually less relevant.”
Rob Salvagno Dec 30, 2019 ▶ 18:13 20VC: Inside The Acquisition Decision-Making Process at Cisco, How To Measure True Success in M&A Evaluation & Why By Not Speaking To Corp Dev Teams You Are Closing The Door On The Biggest Potential Accelerator To Your Business with Rob Salvagno, VP of Co
Disclosure
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“When we made the decision on who we were going to make part of Cisco, we acquired a company that was not a Cisco investment. We acquired a company called the Viptela. And since that time, Viptela has come onto Cisco. It has become our lead SD-WAN offering. And…”
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VC incentives diverge from founders on $100 million versus billion-dollar exits
“Entrepreneurs are often surrounded by venture investors, perhaps very successful venture investors, that may have motivations that somewhat differ from that of the entrepreneur, but the entrepreneur may be going through it for the first time. The VC may have d…”
Rob Salvagno Dec 30, 2019 ▶ 39:10 20VC: Inside The Acquisition Decision-Making Process at Cisco, How To Measure True Success in M&A Evaluation & Why By Not Speaking To Corp Dev Teams You Are Closing The Door On The Biggest Potential Accelerator To Your Business with Rob Salvagno, VP of Co
Disclosure
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“In fact, if I look at some of our most Strategic or financially successful acquisitions, moves like AppDynamics, moves like Meraki, they, in fact, were some of our highest multiple deals.”
Rob Salvagno Dec 30, 2019 ▶ 18:21 20VC: Inside The Acquisition Decision-Making Process at Cisco, How To Measure True Success in M&A Evaluation & Why By Not Speaking To Corp Dev Teams You Are Closing The Door On The Biggest Potential Accelerator To Your Business with Rob Salvagno, VP of Co
Assertion Supported
Cisco acquired AppDynamics one day before its scheduled IPO
“In AppDynamics' case, we acquired the company a day before it went public, and I think what that showcased Is when Cisco decides to do something, we can move faster than anybody else.”
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Disclosure
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“Cisco saw that we also should be willing to invest in one of those startups, despite the fact that we were also trying to build something ourselves, and so in addition to our internal program, we went out and invested in one of those startups. That company was…”
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