M&A Panel Educates Entrepreneurs on Deal Making
The Silicon Valley Association of Startup Entrepreneurs (SVASE) held its monthly CXO Leadership Forum at our office yesterday. The topic was M&A and the panel included one representative from Ridgecrest Capital Partners, a boutique investment bank, and three corporate development professionals from technology powerhouses Microsoft, Cisco and Symantec.
The lunchtime discussion was full of useful information for entrepreneurs. For example, the in-house folks shared with the audience that the overwhelming majority of the deals that they do are with companies that they have known for one-year, if not significantly longer. That was true for all three companies. Entrepreneurs should, therefore, find ways to get in front of both the corporate development folks and the key players in the appropriate business units of potential acquirers early and often. Keep in mind when meeting with potential acquirers, such as Microsoft, Cisco and Symantec, that the typical model is to fully integrate the acquired company, so the fit between the respective teams is a critical element. That is one of the most often overlooked aspects of getting a deal done, according to the panel.
Gary Moon, of Ridgecrest Capital Partners, also gave an excellent market overview for the audience. As expected, Gary's presentation showed a decline in the number of deals and significant compression in valuation in 2009 compared to the same period in 2008. He made the point, however, that the markets appear to be stabilizing, which, if true, should have a positive impact on M&A activity over the next several quarters.
The SVASE CXO Leadership Forum is held monthly at our Silicon Valley offices. SVASE does a great job of keeping these events small (25-30 people sitting around a table talking with the panelists) so there is a very intimate and interactive atmosphere in the room. I highly recommend attending one of the upcoming events.
