10 Things Founders Should Know About Getting Acquired with Brett Goldstein, former Product at Google

Hello, hello, everyone. Welcome, welcome. Just give everyone a moment to get set up in the room here. Hi, everyone. Welcome back to Workshop Wednesday. Already seeing a lot of folks and familiar faces in here. Great to have everyone back. Welcome, welcome. Thank you all. I am coming in live from Miami. Um, I'm in town tonight for the Saastr Miami meetup. So if you happen to be in Miami too, don't forget to snag your ticket, um, and meet us here in just a couple hours at Vezzer Brewery. Um, we'll be there at 4 PM, so I'll drop that link in the chat when we get going. Um, and don't forget that later this month, our next digital event is on Wednesday, March 27th. It's It'll basically be an extended Workshop Wednesday, and all the sessions will be themed around AI. So please, uh, mark your calendars and sign up for that one as well. Uh, but we are thrilled, uh, to have Brett Goldstein, former M&A at Google and co-founder and general partner at Launch House. Um, we're really thrilled 'cause Brett's gonna be covering a topic we haven't done yet on Workshop Wednesday, and he's gonna be talking about the 10 things founders should know about getting acquired. Um, as you know, every Wednesday we have another SaaS founder here, talking to us about the best lessons learned and their best tips and tricks. So really excited for Brett to talk about this topic. We are going to have plenty of time for questions as always. So please feel free to drop those into the chat as we get going and then I'll make sure that those get queued up for you as well. And then if you can also help me in welcoming Brett right now, let Brett know where you're tuning in from by dropping it in the chat. And then Brett, welcome. We'll get started here with a couple of quickfire questions, but thanks so much for joining us.

Yeah, thanks for having me.

Yeah, we are thrilled to have you here. Well, as always, we like to get started off and just share here a little bit more about what you're up to and get the folks an opportunity to learn a little bit more about you. So getting kicked off, would love to hear if you could tell us more about what you're currently up to in your day-to-day role.

Yeah, so I have kind of two jobs right now. One, this The one is I'm a general partner, co-founder of Launch House Ventures, which we started Launch House as kind of a co-living founder community and have since over the last year more just transformed it into an early stage venture fund. So we've made like 50-something investments, all super early stage, no direct thesis, but they usually line up to our interests and our our expertise, which is productivity tools, consumer, digital health, that type of stuff. And then my main day job is that I'm the founder and CEO of Micro. Micro.so is the domain. Micro is an all-in-one tool similar to a Notion or an Airtable or one of those tools. But what's special about it is it has email, tasks, and CRM kind of all built into it. And since we're an early-stage startup, we gotta focus on a very, very small niche, very, very tight target user. And our target user is founders going through fundraisers. So it's basically a fundraising CRM with an email client built in that automatically moves, identifies investors you've been emailing, moves them from one, one stage of your CRM to another. And adds additional information like check size and all that stuff.

Awesome. Um, exciting stuff, and we're glad to be getting you at such an exciting time. Um, I'm guessing this will probably be related, but in the past 12 months, what's been the hardest thing that you've worked on?

Yeah, I would say like going from zero to one on a brand new thing is like pretty hard. Um, and I would say, you know, we were kind of in the idea maze, but kind of not. It's, you know, we're not like reinventing a new category or anything like that. But what has been hard is hiring, right? Hiring is always the hardest thing, no matter how great your network is. It's just really hard to get great engineers on to work with you.

Yeah, we have a lot of topics about that on Workshop Wednesday, so I know it's something on a lot of people's minds too. And then Brett, what project are you working on today that you're most excited about?

I mean, it's gotta be micro.

Yeah.

Yeah. Extremely excited about it. We are every week when we have a new feature launch, it's just like the most exciting thing ever for me.

Love it.

Love it.

You're, we'll have to hear, you'll have to drop in the chat when before the end, Brad, just how people can find out more. And then we always like to ask what is your currently your favorite SaaS tool or platform that you're using?

I've got to say one of the AI chatbots. So, you know, since Claude had their big announcement recently, I guess I'll go with Claude because the team did an awesome job on it and it's pretty useful and we're using it in our product a lot as well.

Awesome. Awesome. Great to hear. Well, thanks so much, Brett. Already we're seeing there are people from truly all over the world right now. We have folks tuning in from Austria, Auckland, New Zealand, Kazakhstan, and then across the US too. So we have a really awesome crowd and we're excited to hear more about your lessons from Google working in M&A. So I'll pass it over to you to dive right in.

Sweet. Nice. All right. I guess you can all see this, but this is our intro slide. I'm Brett. A little bit more about me. I guess I kind of said this. You heard I'm the founder of Micro, a productivity tool. I am the GP and co-founder of Launch House Ventures. Previously, I was actually— I spent more of my career in product management. So Google and Clearbit were the two places that I did product management, but I did spend two years between 2015 and 2017 on the Google M&A team. So my job on that team was, it was actually a very mixed job. I wasn't entirely doing deals, I wasn't entirely doing integration like you typically see with an M&A person. Um, I spent some time working on M&A strategy. So my job was to look at, uh, Google's acquisitions and, and say which ones worked, which ones didn't, and kind of pull together our kind of analysis for Google's board of directors and all that stuff every quarter. We also, I also spent a lot of time on the proactive strategy side. So we created this team called the Scouting Team where we looked at what are the acquisitions and spaces that Google should be proactive. And so there was actually a few of those moments were, you know, 2015-ish. We looked at chatbots, um, we looked at, um, AR, VR. Um, it was a, it was a really, really interesting job. But in doing that, I had like a pretty wide breadth of like seeing what's working and what isn't in M&A. Um, also I spent time at Accenture in the Tech Labs, which is the research and development group that does a lot of early prototypes and stuff like that, um, for, uh, Accenture's clients. So just to start off, like, the, the basic stuff that you need to know about M&A, this is it in one slide. So there are 3 types of deals. Um, we only identify 3 types of deals. This is how most people look at it. There's talent acquisitions, there's asset acquisitions, and then there's asset and talent acquisitions. So talent acquisition is an acquihire, right? The purpose of this, these types of acquisitions, is to get some expertise on your team or get some more firepower. So you will see large companies and small companies do talent acquisitions, but the reality of talent acquisitions is the price varies a lot. Um, it can, it can be just, hey, the team is getting a soft landing. It's like you're getting a job. Or it could be tens of millions of dollars. It really, really varies, but usually it's because the team has some sort of special skill set that the acquirer wants. Asset acquisition is the opposite, which is where you, you acquire all of the companies or certain assets, not necessarily all of them. Could be code, could be patents, could be facilities, could be data sets. Um, and you know, you leave the team and often sometimes the company or the entity behind. Um, and this— there are a lot of reasons people will do this. And this, I think these are usually larger companies, uh, but obviously you're seeing Acquire.com and like these types of things pop up where people are selling newsletters and things like that. It's an example, but you know, it's usually for like getting, getting data, like email lists, uh, legal stuff. So like if you need air cover, patent stuff, or you want to accelerate roadmap. That's why you would do that. And then asset and talent— we call this tech and talent— um, really comes in two flavors. Um, it's your, your goal is to expand your business, or your goal is to expand your— some core piece of your product. And, and the distinction is in usually in the integration. So the idea is like a, a, an asset and talent deal that is about business, usually they'll let sit on the side or sit and be independent or be its own thing. Right? Waze is a good example. It's just kind of like, you know, when we acquired that company, the deal was we're not going to touch it, you're not going to integrate with Google Maps, you're going to be your own thing. But if Google said, hey Waze, you are actually going to be part of Google Maps, Waze won't exist in 5 years, but like all of the awesome features you built into Waze will be in Google Maps, that would be an asset and talent acquisition in the context of of product. Um, cool. All right, so let's do a little quiz. These are 3 acquisitions that Google did, 3 of the largest acquisitions, very, very large acquisitions. Um, and I want people to guess which one, like, what type of acquisition each of these are. So again, there's talent, asset, and then talent and asset. So anyone want to guess Nest? Somebody just throw it in the chat.

Most people seem to be saying asset.

Asset. Asset is incorrect. So Nest, remember, Google bought the whole team, the whole company. Tony Fadell came over. The whole idea was to, to build, uh, Google's hardware, um, operation out that, you know, the dream was that Google was going to be on par with Apple because Tony Fadell was joining the company. So the, the team was extremely important. Tony joining Google was extremely important. Um, so it was an asset and a, and a talent deal, very large one. All right, Motorola. And if you remember, Motorola was acquired by Google and then spun out later. Anyone want to guess?

Looks like asset for this one too, Brett.

All right, that is, that is correct. So, uh, Motorola is a giant— probably the largest asset deal in M&A history, at least in the tech industry. So they acquired the whole company and, um, basically spun it out without the patents. And like one or two teams, so you could argue it's both, but they spun it out and kept all the patents. And that's, you know, when, when internally we talked about M&A or with Motorola, we call it a huge success, even though like, you know, the media companies claimed it was a huge failure. It was a huge success. So Bebop. So Bebop was Diane Green's company. It was a startup, uh, didn't really go anywhere. It was super under the radar. And, um, but yeah, the company was acquired.

All right, more people saying talent on this one.

Talent is correct. So this was a giant, giant, giant talent acquisition. Diane Greene was a founder of VMware, and she was on the board of directors at Google. And, um, basically acquiring her company, even though none of the software was used for anything, um, she was able to become the head of Google Cloud, which was hugely, hugely strategic. So yeah, great job everyone. All right, let's get into some advice for doing— for M&A processes. So what should you do before you even have an M&A process just to begin with? Like, what is— what are the most important things for you to do? I tried to break down— break it into 3 sections 3 things each. So the first thing is obviously you got to build a great company. So M&A is a bit of a black box, but the reality is it's just like an— it's, it's like a hiring process. It's like getting a job, but like 10 times harder, 10 times more rigor, because not only do you have to pass the hiring interviews, but your team does. So I've seen deals where The founder is great, maybe a couple employees are great, but they have too many employees who just like failed the Google interviews and they didn't get the deal. The code has to pass technical review. So part of that is like, is this actually good code being written? But the other part of it is like, does this team actually— did they do what they say they did? Like, have they built what they claimed that they built? Similar to like, you know, due diligence with fundraising. Um, usage and revenue has to pass diligence. There's been some deals in, uh, in the media lately of people lying about usage and, and revenue and stuff. Don't lie about this. You have to, uh, the best thing to do is just not lie. Uh, it's better to have amazing usage and revenue numbers, but the reality is like You know, you can just— it's— you can get acquired even if you don't have great numbers here, especially if it's a talent acquisition. So build a great company first and foremost. It'll open up all of the doors for you to get acquired. Um, yes, bad companies do get acquired, but they get acquired for different reasons. Um, okay, cool.

Oh, Brad, I think we lost our screen share.

Oh really? I knew this was going to be— okay, okay. Do you guys see Talk to Product now?

We're good, thanks.

Okay, cool.

Uh, probably the most surprising thing is that in this space is that deals that go through the M&A team have a very low success rate, like under 1%. Um, and there are all these different types of people who will go and pitch deals to the corp dev team. It's like, you know, these bankers who are running processes with their companies, um, or it's like people who know people on the M&A team or something like that. The reality is like the M&A team is just a team that facilitates the transaction and negotiates with you just to get it done. The person that makes the decision is the product person, the person who your team will be reporting into. So, and ideally as high as possible, right? Like the dream is that like, you know, Sundar Pichai or Tim Cook and he wants to acquire your company, it's gonna get done. But if you go and talk to, spend all your time talking to M&A and building relationships with M&A, good chance you don't get a deal done. And so the best advice is literally just talk to product. Find people in your space, find acquirers that are, that are relevant, um, to you and go and talk to them. So I would focus on companies with like strong M&A functions. So Google, when I was there, was acquiring like, you know, 40, 50 companies a year. A tiny startup is not acquiring that many companies, but, you know, they may do a talent acquisition, uh, with you. And then the other important thing is that, like, the right companies to talk to are your partners, your competitors, and then other kind of, like, adjacent players in the space, your customers as well. Okay, be financially viable. So this is really, really important. The more money that you raise, the less options you have for an acquisition. More, more so, the larger your valuation and the worse your liquidation preferences are, the worse your, your financial opportunities are. So like, you only make money— this is how liquidation preferences work, obviously— you only make money after your investors get their money back. There was literally a tweet today where some founder shared that like their company raised, raised at like a $400 million valuation and got acquired for $300 million. So the founder got zero, right? The founder got nothing. Obviously a lot of acquirers will actually like put things in place to ensure that the founder is incentivized to take the deal and stay at the company, but it's you know, it's not the same as actually like making that com— making that money for real with your, your actual equity. So there's that. And then the other thing is, uh, keep your books clean. Like, going through your finances and cleaning your books during a process is an easy way to slow down the process, and slowing down a process is an easy way to kill a process. Uh, and obviously don't lie about stuff, but like the key thing is just keep things clean and ready to go. All right, during the M&A process, let's say you are— you're in the midst of a process or the beginning of a process. What are the 3 things to do? Um, this is a key point, is sell really hard. Um, despite the fact that you should be playing the game and, you know, playing hard playing this hard-to-get stuff. We'll get to another slide. Um, you really need to convince the acquirer that your company is going to dramatically catapult their company, um, and especially their personal objectives. So again, we talked about you, you need to talk to product and you need to find the stakeholder at the company, uh, within product that is most relevant to you. Figure out what their goals are, figure out what the company's goals are, and then create mock-ups, prototypes, business plans, like code. You, you may— you often literally write real code to demonstrate why your company is going to be, uh, incredibly valuable for them. Um, but the flip side is you still should play the field, right? So when you are, uh, going through an M&A process with one, you should probably assume it's going to fall through. But the nice thing about M&A processes is that when somebody is interested, everyone else seems to be interested too. So as soon as you have some sort of bite with, you know, one, uh, one potential acquirer, I would start up conversations with the others. Obviously, hopefully you've been talking to product for quite a while and, uh, this isn't a brand new conversation. You've built a relationship, but, uh, The best thing to do is to play the, you know, play the field, talk to a lot of people at the same time. Also important is that I've seen companies basically do fundraisers at the same time as M&A processes, and it's great because it puts pressure on the acquirers because they're saying, oh crap, like, look at this term sheet they got for their next round. If we don't buy them now, we're gonna have to pay up later. And investors like it because they're— they basically see, you know, they see the money, they see the dollar signs, right? Like, if an acquirer is ready to buy now, they'll probably be ready later. Um, this is another really important thing, is to keep it quiet. So, um, Paul Graham has some essays about like the M&A process that he went through with his team, but one of the things that stuck out Um, was that, uh, oh no, it was— there, there was a guy who was, who was supposed to be acquired, um, but they wound up acquiring Paul Graham's team anyways. So what happened is like this guy basically tells the acquirer, um, right before they sign the deal or something, that like, hey, like, Paul Graham's company is really, really good. They're a competitor. Like, glad we did. Glad you did. Glad you acquired us instead of them. And then the deal basically falls through the next day and they go and acquire Paul Graham's company instead. So all this is to say is just keep your mouth shut, both when you're negotiating, say, as you know, don't say too much, but also with your team, it's really important to not overshare because what will happen is your team is going to start imagining the, the house or the car they're going to buy and stop being productive because, hey, like, why keep hustling when, you know, you're gonna, you're gonna be a bazillionaire in, in, in a couple months? And so it really slows down the product development. But there are points in the process where you do have to loop people in. Some processes that we've done at Google, you don't have to, like, you know, the founder will just sit down with the corp dev team and talk about every employee. Before the acquisition. But oftentimes for small teams, they do need to pass interviews and all that stuff. So I would just like avoid talking to your team about the process until they absolutely must know. That's true with your mom, that's true with your friends, your partner even. Just like set expectations. And then yeah, Just don't tell anybody. You don't have to. All right, after the process. All right, so you have nailed your amazing acquisition. You are so excited. What do you, uh, what are the things to think about? Uh, getting a financial planner. Unfortunately, I have never been acquired myself, so I don't have any, uh, I don't have any connections for you. But if you ask a lot of acquired founders, they probably have advice here. But the reality is this is going to be the worst, most complex, and painful tax season of your life. And so it's good to just start that conversation right away rather than waiting, waiting for the last minute. Um, this is really important. All these acquisition prices that you see blasted out on social media and stuff, like, wow, look, they got acquired for this amount, they got acquired all of them have strings attached, all of them. And they're usually tied to retention, right? Like, you, you are usually going to have to vest over 4 years. Some acquirers will take your— all of your equity back and make you re-vest it. Some acquirers will give you all your equity up front but then give you even more, uh, what we called at Google retention, uh, to to, uh, to keep you around, right? Again, like, if you are a talent or a talent and asset deal, the acquirer wants you to stick around, and so they'll do whatever they can to, to do that, including take your equity back. Um, the other thing is milestones. So, you know, if you are, uh, joining to launch a certain feature in a product, then, uh, they could tie your, your payout to the number of users of that feature. So it's really important to negotiate these really, really hard, but also to hit them because, you know, no matter how much the acquisition offer is for, you just don't quite get it unless you actually hit these numbers. So one thing we found at Google is that the majority of founders left well before their vesting was up. Um, 4 years is the usual, usual vesting. Uh, Google would do like stock refreshers at the end of those 4 years. A lot of big companies do this anyways, but obviously founders get like special treatment, especially if it's like a big important area. Um, it was about 2 and a half years that a lot— that most folks left. And when I, I actually went around Google and I was asking some of these founders how they're feeling or what the deal was. And they just like weren't that happy. You know, you go from being a wild animal, catching, you know, killing what you eat, you know, being totally in charge of your own destiny to being kind of like part of a massive company. It's a pretty jarring experience. And I think that a lot of entrepreneurs are not big company people by definition. This is probably different for companies like Meta even, or especially smaller companies. If you were acquired by a Notion or something like that, it's probably very, very different. I noticed that a lot of deals, a lot of acquisitions where the companies joined like a rocket ship pre-acquisitions, like Instagram. I imagine that recent Notion acquisitions will do this. They actually have pretty high retention because you're, you know, you're joining something really, really that's, that's growing a lot. But if you are acquired into a Google or Meta or something, it's not uncommon to feel sad and aimless and like, you know, whatever. So my best advice is to not fight it and just get back out there. Like, it's okay to leave money on the table. Everybody does. You know, you're a founder at the end of the day. Um, and you should embrace your identity, uh, over money. So yeah, just, uh, re-summarizing, key takeaways are: before your acquisition, or before you even think about M&A, talk to product, build relationships with relevant product teams at customers, partners, competitors, all that stuff. Be financially viable, don't raise too much. Don't raise at a high valuation. Don't raise with horrible liquidation preferences and keep your books clean. Also, build a great company, hire really well, write good code, build a business that actually is working. During your acquisition, sell hard. Make sure that you are creating mockups and prototypes and doing whatever you can to show the acquirer how valuable your company will be for them. Play the field, which is the— I think the opposite of selling hard to an individual acquirer. Start a fundraise, talk to other acquirers at the same time. And then also importantly, keep it quiet. Don't tell your team or other people for as long as you can. And then afterwards, get a financial planner. Gonna have to figure out what to do with all that money. Congrats. Hit your metrics. So again, you won't get your full payout unless you hit these metrics and milestones, and then get back in the arena if you want to. You're, uh, you know, you're a founder at the end of the day. That's it.

Thanks so much, Brett. We'd love to move to some Q&A. Um, you can feel free to stop your screen share. That's perfect. So you can see some of the folks that are in the room. Um, Sean just had a clarifying question. I think when you were, um, And about midway through your presentation, just was wondering if by legally allowed you meant contractually permitted.

Um, yeah, so basically what, what'll happen is that there'll be like a, like a non— there's like a lockup period or just like a time where you're not allowed to talk to, talk to other— you can't shop the offer around. So this is actually an interesting story about the Waze acquisition. Waze was actually in the middle of this conversation in this period with Facebook. Facebook has had made an offer in a ways for like some $800 million or a billion dollars or something like that. Google somehow found out, but the Waze team was not allowed to reach out to Google. There was no way, it was illegal. And so the Google M&A team basically lobbed an offer to them without knowing what the other offer was and the way his team wound up accepting it. So there's a period basically at the end of the process you can't talk to other people.

Awesome, thanks for that clarification. Joe, are you still on for your question?

Yeah, thanks for walking through that, Brett, super helpful. Uh, how typical is it to let the acquirer interview your team? And then like, just mechanically, if you have 50, 60, 100 people, are they gonna— is it expected they would interview everyone? Um, it depends on the deal and it depends on the acquirer. So stuff that we did at Google was we interviewed the, the key people. Um, So actually, really important note is that usually G&A marketing sales like does not get acquired. They, they, they're basically have their like packages that and they're sent on their way. They're not part of the acquisition unless it's staying as a separate entity. So like obviously those people won't be interviewed. It's really engineering product that matters. And so what they'll do if they don't want to interview everyone, they'll basically sit down with managers and they'll go one by one and be like, tell me about this person, talk to me through their projects, show me their code, like that type of stuff. Gotcha. Okay.

Uh, looks like we have a couple other questions, um, in the chat. Ali, are you still on to ask your question?

Uh, yes.

So, um, I don't want to sound negative, but based on what I've observed, most M&A are not successful. Is this accurate to say?

Yeah, correct.

And okay. And then why they do it so often? My theory, again, I'm not into conspiracy, but my theory is that a lot of people on the sides making money. So they really don't care because I've been in couple and I'm saying, what are you thinking? Why are you doing that? You know that this is the right thing and they do. And then you find, you know, the board member with the, there were some, uh, some hanky-panky going on in the back. Again, I'm not into the controversy type of, type of stuff, but a lot of them just don't make any, any sense, even for somebody like me. And yet they do it.

Why?

Because some people making money on the side? Or—

I mean, the flip side is like, there's a lot of M&A that is actually has been imperative to company success. So Google would not be as successful as it was today, as it is today, without you know, AdSense, DoubleClick, like these are the, these are the acquisitions, YouTube, um, that basically built those entire businesses. So obviously there are a lot of companies in the world and you don't have to be smart to be the CEO of a company. Um, you just have, you know, obviously you need to be a little smart, but you can be lucky. So that's what I chalk it up to. Okay, thank you.

From the ones that you saw that were successful at Google, like, are there any big commonalities that you saw that like really move the needle?

Um, I think like having like a, an advocate that actually gives a shit and makes sense is really important. So it's like, you know, it's just kind of like you said, people who had an acquisition idea and somehow got it through but like didn't kind of follow up to make sure it was successful. Um, it really depends on the deal. Google has a storied history of messing up cultures of companies that are acquired. Like Nest was— Nest and Dropcam were kind of a shit show because hardware culture turns out to be very different than software culture. And the best thing to do for large companies is just keep them kind of separate and slowly integrate them rather than kind of force them to adopt kind of these brand new cultures and stuff.

Steve, you're up with a question about market share and customers.

Thank you. Thank you. Yeah, Brad, I appreciate you taking the time. You had talked about asset acquisitions and you kind of talked about maybe datasets or technology, that sort of thing. I'm in a small company. We've got a handful of customers. Our technology is clever, but it's not overwhelming. But it seems to me that we could target some people who might want to buy our customer base and put it onto their platform and be more efficient with it. How often does that happen where the acquisition is really for customer market share share revenue? Um, I have seen it in the like early stages. So we have a newsletter and a friend reached out to me about acquiring the newsletter to like start another newsletter. Um, you know, it's always a calculus of like cost. So it's like, you know, marketing costs a certain number of dollars per acquisition And so yeah, if you have 100,000 users and you can guarantee all 100,000 of them are gonna go to your product and like a newsletter ad is like $1.50, then you just have to be below 150K to make it make sense to do that rather than invest in advertising. So it's one of the weaker acquisition types. Usually it happens in media, but it's just not like these aren't like big tickets. Okay, thanks.

Thanks, Steve. Jane, you have a question about the founders, how long they're staying afterward. I think a few people were curious about this too, so I'll let you jump in.

Thank you, Brett. This has been very, very helpful to me. And I'll sort of preface as well, is like you mentioned that the average founder lasts around 2.5 years, right? And How about going into, from a founder's perspective like me, going into a deal of being like, okay, 2 years we get sort of merged into the big thing, or 4 years we just stay our culture and we just build up, like keep our culture. Is it culture related or is it, can you go in and say, hey, heavy hand on the vesting schedule type of thing?

Everything's negotiable. Like you can negotiate everything, but like the reality is You know, probably 90% of them, 95% of the most successful startups all have a 4-year vesting cycle, right? And the same thing with M&A. So like, you're gonna have like some sort of vesting cycle. So sure, you can negotiate. If they want you bad enough, they'll, they'll figure something out. But you know, you're— that's what you're giving up with, you know, with getting an acquisition. You get— you're trading money and de-risking your your life for getting a boss, you know? Yeah.

Thank you, Brett. We have a question from Jason who's watching from LinkedIn today. Um, Jason's asking, uh, how do you make sure that you don't over-negotiate on price and that you don't break things?

Um, so behind closed doors, like the way that companies are valued, um, or at least the way that we did it at Google, is that they'll do like comps. This is actually similar to, uh, venture capital and fundraising as well. So like they'll basically take a bunch of recent acquisitions that either Google did or a competitor did, or they heard about, um, um, recent valuations as well, and then they'll compare those to what that what that company brings to the table. So it's probably the same exact process that you would go through when you're deciding how much— what valuation range makes sense for you to raise on, um, right? If you are making a million dollars a year, you, you can't, uh, and it's a business acquisition, you can't— you probably can't, um, ask for like a $50 million, um, a $50 million exit unless there's like some insane talent there. Um, yeah, and then also obviously like talent acquisitions, so acquihires, those are usually pretty low unless you guys have some insane in-demand talent. So right now, AI researchers, right, they're, they're making, you know, probably like a couple million a year each. If you have 10 AI researchers, you should be demanding more than $20 million as a, as a talent acquisition because Those are incredibly valuable people.

Thanks, Brett. We have another question about talent. Bill is asking, if you're acquired and your milestones are based on your acquirer's performance, i.e., their sales team, how do you tie that dependency? What if you get the B team from them?

Um, I guess this is just a I mean, I don't think this is the case very often. Like, so the reality is an acquirer— like, bonus structures often are tied to company-wide performance that is out of most employees' hands, right? So that is probably going to be a factor in it, like, one way or another for certain types of companies. But I'd be surprised if, like, an acquirer, like, acquired a team and basically gave it to— gave the, the outcome to somebody else. And that, that'd be something you would negotiate for sure.

Awesome. Um, Alina, you had a question about current SaaS market if you want to jump in. Um, yeah, thank you so much, Brett. Um, I was just curious if there's anything that you're seeing that's pretty unusual that's happening on the market? I know there's lots of shifts, um, or any latest trends.

I mean, the obvious thing is that there's like some regulatory pressure, uh, with the larger companies, right? So you saw Adobe try to acquire, um, Figma. You are seeing some like people chill out, um, like the larger companies chill out with their acquisitions because they don't want any sort of antitrust stuff. I think Google, if they wanted to acquire Anthropic, could not. For example, like, they would, they would be kind of sued up the ass because they're like, you know, it's very anti-competitive. So there's definitely less M&A happening, but, you know, I've heard from M&A lawyers and others that it's starting to pick up again. So yeah, it's also a function of the market, by the way. So when the market's down, less M&A is happening. When the market's up, um, there's more M&A. It's a little bit paradoxical because, uh, like, larger companies, um, companies that aren't doing super well, um, will go and try to get acquired, like, when they're during bad markets. But the reality is, like, big acquirers want, um, I don't know, they just need a more confident market to be able to do more acquisitions.

Alfonso, are you still on?

Yes, I am.

I don't know if Alfonso is still there, but I can jump in. He, his question is about setting up an M&A team. How do you do it? Where do you find the talent?

Yeah, I think this is about like, this is similar to like setting up any team you've never done before, is that you go, you go and find two types of people. People who've set up these teams, so like other founders who have, who are like a step ahead of you, who have set up their own teams, as well as directors of these teams. Um, you ideally those types of people who are, have set up teams themselves. So I don't, outside of that, it's, you know, look for corp dev people basically.

Thanks, Brett. And we'll close with this question, but this has kind of been a common theme throughout the chat, the whole session. But what are some of your best tips for attracting an acquirer? Like what were the things that stood out for you when you were at Google, when you were evaluating deals that people could think about here in this room?

Again, it all comes down to how great is the company and how big of an impact is it going to have on the acquirer. Very importantly, how clearly do the, the product people inside the company know that and are excited about it? So like the most successful deals, I just like make up a perfect, perfect scenario is You are friends with the head of product at Google AI, and you've been friends for a long time. You've worked together at previous companies. They know how you work. They love and respect your work. And you are working on some AI startup that perfectly fits into their offering, right? You have some API endpoint that does something that they were thinking about integrating. But they haven't yet. And, uh, the, the acquirer is the guy, guy or girl that you know at that, at Google AI, is a huge fan of you, huge fan of your company. It's been, you know, been watching you for the last year, seeing your progress. And then, um, you know, you've been getting a lot of traction with customers. Your team is amazing. Uh, it's small, it's like a, you know, not a super high valuation. And then when you go out for your fundraise, um, you go back to your friend and you say, hey, we're gonna— we're fundraising right now, um, you know, acquisition is not on our— on our minds, but would love to kind of chat about what that could look like. Or ideally, they proactively reach out to you. But that's like the— that's like a perfect scenario, is that a lot of synergy— I resisted saying that word low valuation, and a lot of trust.

Awesome. Thank you so much, Brett, and thanks everyone for the amazing questions. We really appreciate everyone joining, Brett, and we really appreciate all your time. Getting a lot of great feedback. People are really thankful for all the insights. And definitely get in touch with Brett. He is really active on Twitter, on X, so make sure to follow him there. And then this session will be live on our YouTube as soon as we get off. And then also the slides will be up on SlideShare later today. So thanks again, Brett. Really appreciate it. And thanks everyone for joining. We are back next week for another amazing Workshop Wednesday session. We have Jeff Yoshimura. He is the former CMO at Sneak. He's gonna be doing a really awesome topic covering his lessons that he's learning right now as he transitions from 20 years in an operator role to being a time founder. So he's going to be with us next week and we'll be sharing more of his insights then, and we hope to see you there. But thanks again, everyone. Thanks, Brett.

Thanks, thanks everyone. This is awesome. Take care.