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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What's the right timing to consider an exit? Let's say you've proven the business model and you what to know whether to raise more money or talk to acquirers. In the case of Mixer Labs, why did you exit as early as you did? What signals do you look for?
Twitter (sold Mixer Labs)
|Sure. There were four considerations. The first one was the changing dynamics of the market place. Geolocation was heating up as a market and the direction we were heading in was a direction that we thought some very large companies may enter. We thought Google may supplement what they were doing with local. Twitter at the time was thinking about providing geolocation as a broad based thing for its ecosystem. And so we saw these large players with very large ecosystems considering the space. It didn’t mean they were going to move in that direction, but it was one consideration. Second, we thought it was a great place where our technology could actually have enormous impact. There is this massive developer community that we had the potential to access. Third, we thought that there was upside because Twitter was a company that we felt could have a lot of multiples in terms of the valuation that it was at at the time, and I think that's actually proving true right now with some of the rumors that are going around in the marketplace about them. And since I said four, I have to come up with a fourth now. I really like Ev, so there you have it.|
Senior Director, Corporate Development
|I was on a panel with these guys in the summer and I said there was no time too early. Feel free to reach out to us at any point. And we did get quite a few people reaching out there very early. But, that said, it's really sort of true. You don't need a big agenda. You should have a general sense of the different parts of our business and how you might fit in. But if you think there's a realistic way that it might fit in, feel free to reach out and then we can get a conversation going. It doesn't need to be: Hey, I'm ready to sell. And all those kinds of things. I think if you have something to show, meaning a product in market that's gaining traction and that gives people more to talk about. But other than that, I think it's perfectly fine to have an early dialogue. It takes time to get to know people across the company and to set that stage. Again, the theme of this night is thinking about your exit and I think there are usually a few places that are going to be a home. And as I said earlier, we focus a lot on fit, and frankly, you should too because you are going to be working there for years afterwards except in really extreme instances. The more time you have to get to know people without the pressure of trying to get the deal done will make you more confident when you get to the point of looking at different options. The one that feels right ... you can be sure is not just emotion of the moment, but that it’s had time to settle. So I think it’s good to go ahead to get started, and to know a bunch of people. Not just the Corp. Dev. people in the business.||