Insight certainty 3/5 debate potential 2/5

Unattached VCs Build Credibility and Value During M&A Negotiations

Chad Richard · 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 · Nov 22, 2017 · at 22:33

Chad Richard, SVP of Business and Corporate Development at Yelp, discusses how VCs can best assist portfolio companies during acquisition negotiations.

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“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 because they build up that credibility.”

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More from Chad Richard

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 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
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 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
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 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
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 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
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 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
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 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
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