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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Can we talk about the diligence and information? For example, worries about your becoming a competitor. You know, what information is disclosed in the process and when?
Director, Corporate Development
|Absolutely. That's a good question. And as paranoid as start ups and entrepreneurs are with respect to their confidential information, as they should be, we, as a big company who pride ourselves on doing things "right and good" and "not evil," are very paranoid. And I think I can speak for most of the companies up here about actually being tainted with third party confidential information. So we are very careful to only receive just enough to make decisions to get to the next step. It's a kind of pyramid process: as you get deeper, you sign a term sheet, and you're close to a merger agreement, we would exchange a deeper kind of confidential information. So we don't want to know your secret sauce before we get to that stage, actually. We get a good idea of things and we try to agree on what the deal terms would look like. Once we sign a term sheet and go through the process of diligence, and we get closer to a definitive agreement, you would typically see us do things like code reviews and such.|
Senior Director, Corporate Development
|My working assumption is, in theory, our engineers could go do anything if you give them enough time, so I'm not talking to any company that we don't already assume gives us a speed to market advantage or provides something really unique. So they can just take that off the table and not worry about it. I think that the true secret sauce stuff that comes out in the code review can taint you, and that comes extraordinarily late in the process. We even use third parties for code scans and things like that so we truly aren’t tainted.||