On December 9th, Venture Archetypes and Greenberg Traurig pulled together a panel of some of the top entrepreneurs and most active acquirers in Silicon Valley to answer your questions about start-up M&A. So whether you’d like to know what the serious players are looking for or how to position your start-up for a healthy acquisition, you’ll find the wisdom right here!. Read the rules.
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How common is it for an acquisition to start out as some sort partnership or strategic joint venture? What percentage of the time is there a preexisting business relationship?
Director, Corporate Development
|I would say that almost all of the deals that we do tend to be, at least from our standpoint, very broadly viewed. If an acquisition makes the most sense, then that’s the route we go. |
Senior Director, Corporate Development
|We have these meetings during which you're trying to sort through what could we do together, and then sometimes you say, Wait a second. This really only makes sense if we are going to do the acquisition. In terms of the other side of the question, for the people who are existing partners and then leading to acquisitions, you're sort of pulling a number out of thin air. Maybe 50% of the time there's some sort of business relationship already in place.|
Manager, Corporate Development
|With some companies we're talking to now -- and for at least one acquisition we've made -- we had some sort of previous business arrangement. With little companies, because we're bigger, we feel like if we do a partnership, we are going to make them big and successful, which is good. It's great that companies become big and successful when working with us, but if it then puts us in a position where we could become held hostage to that company, or we can't control our destiny, or things may not go the way we anticipate in the future, it can become challenging. So we try to cut that off at the pass and say, Listen, it's probably better for our interests to try to acquire this company now so that we can build value together, rather than have more of an arms length relationship where in the future, if there's conflict, it's going to be more challenging for both sides. There are some circumstances where that happens and it makes more sense to acquire now rather than partner with the company so that they grow. Then you have to think about what to do down the road.||