Building Your M&A Reputation: Why Relationships Beat Transactions Every Time with Andrew Cohen

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I'm Kisam Patel and you're listening to M and A Science where we talk with deal professionals and learn valuable lessons from their experience. This podcast focuses on stories, strategies and what actually happened during M and A deals. Hello M and A Scientists. Welcome to the M and A Science Podcast. This show is part of our mission to rethink how M and A is done and build the operating standard for buy side M and A.

That old school seller led approach.

That era is over.

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About strategy alignment and execution, putting value creation at the center of every deal.

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Not just about closing the deal, it's about making it successful. And we get there by learning directly from the best. Do you want to go deeper into the framework? Grab my book buyer led M&A if you want the full system, frameworks, templates, exclusive content, expert Q and A sessions, experts, access to me and the AI Powered Intelligence Hub. Join the M and A science membership@mascience.com it's the home of Buyer led M and A. While you're there, make sure to sign up for our free newsletter. Lead the Deal, Own the Outcome let's jump in. Today we're joined by Andy Cohen, Vice President of corporate development at F5, the multi cloud application security and delivery company. Traded on NASDAQ underticker FFIV with a.

30 year career in M&A.

And he's closed 60 deals across high growth tech companies including Citrix, acquia and now F5 where he's executed eight acquisitions in just three years, including a record breaking year with four deals. What makes Andy's perspective especially valuable in his core belief that M and A is fundamentally about relationships, not just transactions. He's built a reputation where every single CEO he's worked with over six decades of deals will take his call tomorrow. And that kind of trust doesn't just happen by accident. Andy, how are you doing?

I'm awesome. How about yourself?

Hey, thanks for taking the time here live in Miami.

I know it's exciting. Welcome. Bienvenito Miami.

Yes, I really appreciate it. You take a break from doing some deals. Can we kick things off a little background yourself?

I've been at F5 for three years and have spent about 30 years doing mergers and acquisitions. Spend a couple years as a VC. I definitely don't recommend becoming a VC in 98 before the market crashes. One of the things that is helpful from my perspective is I've been on the buy side, I've been on the sell side, I've been on the VC side and I've been on the small company side. Having sat in every seat at that table just gives you a really good amount of empathy for what different people are going through.

You got a fair point. Look at my own background where I did advisory, buy, sell, sell, some consulting work. But is that the main driver is like you now all of a sudden when you do work with one perspective that you start understanding what the concerns are and things like that. Is that what helps you when it comes to deal making today?

100%. To me, you're convincing people to change what they're doing and what they've been working on for years. And you've got to convince them that your alternative is the best home for their team, for their technology, for them to help make their dreams come true. Understanding their perspective is super important.

I have a feeling it's going to be a theme of our podcast here. Empathy is a big element of building relationships, I think. So what's something you wish you knew before your first deal that took you years to figure out?

You don't win a deal. Zero sum Thinking is really, really hard. I went in thinking I've got to win everything. And it became very clear to me that it's actually the exact opposite.

What's the mindset then? You should have to approach a deal.

How do you make sure that everybody gets enough of what they want, that they are convinced that that's the best alternative?

The no clear winners, Everybody gets just enough.

Absolutely. There are lots of ways to define win. You'd love it to be win win for everybody. And that's obviously always the ideal. But nobody gets everything that they want because if I'm happy and you're miserable and I feel really good, the deal's not gonna work.

That's a fair point. I'm going through all these scenarios in my head to find out where that would not be true.

It wouldn't be true in an asset deal where you're not picking up people. It wouldn't be true in a place where all the management team is gone right away. In those cases you can certainly negotiate harder. But again, the team has to wanna be there. The vast majority of the things we're doing are technology deals and all the assets leave in the parking lot every night.

And the ideal one where there's more of collaboration that's going to happen after the deal. You want to make sure there's alignment. Then you want to feel that hey, this is enough for it to worth it. But then they're also optimistic about what the future state of the future lies.

Absolutely. Got to convince them that the alternative of joining a bigger company is a better alternative than continuing to do what they're doing.

30 years, 60 deals, you use this phrase, this is the best job in the world.

Yeah, I'm super lucky. I love what I do. I get to work with the smartest people at my company and understand what we're doing and what we want to do. And then I get to work with bankers and VCs and advisors like yourself. Meet lots of different companies, learn the newest and most interesting technology, have meetings with new folks. If we can put a deal together, great. If not, I learned something and made new friends and apparently every two weeks they give me money. It's great.

What's like the least favorite part of it? I feel like it's not that rosy. You gotta have a level of stress.

Tolerance to build amount of ambiguity, chaos, change, disappointment, frustration. For every deal that gets done, there's four or five that you would have liked to have done that you can't. I've spent a lot of time working for Medium sized public companies. It's not the multi, the giant ones. And oftentimes it's been traditional public companies. I'll say everything I like, I can't afford, and everything I can afford, I don't really like. So sometimes it's really finding that Goldilocks deal where it's not too big and it's not too small and it's growing enough that it's not too expensive, but not enough that it's not interesting. So it definitely is hard to find the needle in the haystack.

That's true. That's. I think the frustrating part of M and A is that you could do a lot of work on a deal and then there's a reason why you don't finish it.

And most of those things are totally beyond your control.

Okay, so you have this level of patience. Is that fair to say, is like a required trait?

Patience is an interesting way to say it because I'm an incredibly impatient person.

But I agree, that's another trait. Like, you want to keep pushing a.

Deal, you've got to be incredibly proactive. Time is the absolute enemy of all deals. You've got to continue to build momentum.

And you know what? It's not patience. It's resilience.

Resilience and grit are probably the two ways that I would describe it. Because. Because patience, if you wait for things to come to you, you'll be waiting a long time.

And that win makes up for those four or five that didn't pan out.

Absolutely.

Okay, we got this. In terms of a sense of what it takes to be good at this role, can we talk about what's your favorite part of the role?

I love meeting new people and learning new things.

Can we walk through what's your approach? A big part of this is building relationships, right? That's kind of the theme of the podcast. It takes relationships. Walk me through what that looks like from the beginning.

Building relationships is about making sure that you understand what different people want. For me, I've had the benefit of having done this now for 30 years. I have a really large network of bankers and venture capitalists and former CEOs and former employees and friends. If there's a transaction or a space that we are interested in, I'm usually one phone call away from a really good warm introduction and people will say, hey, we're not sure whether a deal is going to come through, but it'll be a good process. You'll enjoy meeting him and he'll treat you with respect and run a good process.

That's part of it is you got an ecosystem, you got your reputation. This is earned. This is like the equity you earned from doing this a number of years.

Absolutely. And the other thing that we'll talk about is this is an apprenticeship and mentorship job. You learn it by sitting by somebody who's done it before, understanding how they did it and then just figuring it out over time. In spite of the fact that there are wonderful playbooks and things like what you represent. But it's really just repetition. And at bats, most of the deals.

You'Ve done are proactive.

Almost all of the deals we've done are proactive.

Almost all the deals you've done proactive. There's clearly benefits of doing proactive deals versus jumping in the auction process.

Yeah, I've participated in a couple auctions, maybe one deal. We won through that in that process. That's not really the way that most strategics end up with transactions. That's much more a PE type process than what we usually end up doing. We're looking for very specific pieces of technology and teams to get us either new functionality or into a new space. And those are usually not things that you end up with a big process around.

So for you, it's very focused on this strategy that makes it where you have to find specific things that you're looking for in the market.

Absolutely.

And that kind of pushes you more so to look for things that aren't necessarily being chopped around.

Yeah. And that's why a lot of it is making sure ideally it is a company that is just at the place where it's making the decision of we've got really good product market fit, we've got really good technology. And to get to the next level is going to require us to raise a lot more money and do a bunch of new things. Maybe it's start a new salesforce, maybe it's go international. Things that big companies are really good at helping you to do and convincing them that we can help you adjust for that risk and get the appropriate payout as well as doing the right thing for the team and technology, I.

Want to take that apart, but I got to ask. So all these proprietary deals you've done, if you look at your effort from building this relationship to turning the deal.

Actionable, what's your average?

Do you think it takes of that effort and building the relationship to the deal turning actionable? I understand somebody could already be contemplating go out to market and boom, things turn actionable rather quickly. And some it could take like decade and Then yeah. So I'm curious if there's like an average you've experienced.

It's interesting. I haven't actually calculated an average. Usually it's a 6 to 12 month process from hey, let's start the discussion, let's understand what you're doing, let's learn the space, let's understand all the other companies in the space. Why are you differentiated? What's your competitive advantage? Why do you fit best with us? It's usually a good amount of time in that process. I also think, by the way, and it's slightly different than the M and A discussion, but one of the things that corporate development does and is really helpful is strategic investing, which I think gives you an opportunity to talk much earlier in that life cycle and build more of that relationship. So that you're not talking about a, hey, I'm only here to do an M and A deal in the next six months. It's let us participate in the process over the next couple years and understand if it does make sense.

Was that common in most of the companies you worked with that you had strategic investments as part of the approach?

And I think a lot of forward thinking technology companies are doing that now. I did it. We had 30 investments at Citrix and we've done now just a couple at F5.

That helps. Now let's walk this timeline where you have first contact because obviously you got a big network, you do introductions. If you don't, you're going to have to hit the phones, do your cold outreach. And probably what you did in the early days, dude, really put the effort in there to get the folks on the phone. What does that look like? First conversation? How are you facilitating it? What's relationship development look like from the first touch point?

I'll give you an example that happened this week. I was reaching out into a new category, kind of an AI adjacent space. We did a full review of the companies in the space. There are 30 companies, we triaged it down to eight that we thought would be a good fit for the approach that we're taking. There are four that we wanted to go to first. I did a cold LinkedIn invite to one person and ended up talking to them the other one. I found somebody within our company, actually a CEO, former CEO of a company we brought in that knew the founders and made a warm introduction. And then just through a bunch of frankly, Internet research, found that the other company, the main investor was a guy that I sat on a board with 15 years ago, reached out to him and he's Introducing me to the company tomorrow.

Your cold outreach on LinkedIn, what did that look like? What was the messaging?

Hi, Alex. I'm Andy. I run corp dev at F5. We're really interested in your space. We'd love to learn more. Look forward to speaking with you.

Ooh, you had a assumed close there. Look forward to speaking with you.

Yeah, I mean, if he doesn't want to speak with me, then he's not going to reply, and that's okay, too.

I think I learned that that's, like, probably my expertise. I probably cold outreach to you at some point. That's how we got to know each other. And the gist of it, people, Actually.

It was originally through Jeremy.

Oh, Siegel.

Yeah.

Shout out to Jeremy Siegel.

Absolutely. Way back when.

I don't know anybody more networked in the east coast and corp. No doubt about it. Absolutely. So there you go. That was a warm introduction. So haze off.

No doubt about it.

That's ideal. You get the gist. People are like, I'll take the call. Not. And then you get the first conversation. What's your approach? Is there almost like an outline or format that you follow, or is it.

It's probably not quite that formulaic. A lot of it is understanding where they are with their company, explaining to them why F5 has interest, why doing something together could make sense, and understanding what they're thinking and where they are in the process. But frankly, all of that starts after just meeting people, understanding their story, what they do, how they come up with the idea of the company, what in the rest of their career got them the right and ability to do what they're doing better than anybody else. And everybody likes to tell their story, and it's fun to hear.

Would you say that's the starting place is get the story?

Yeah, absolutely. You can't know the company until you.

Know the person and you're hearing about that. Oh, I came from this aggressive academic background, or I came from an immigrant family, or just these little nuanced things that helps shape the story.

Basically, all of it are data points that help you understand what that person wants to do.

This is the what different people want.

Exactly.

Is there anything specific that you're looking for in that story that gives you some indicators?

I always want to understand what drives somebody. Is it pure money? Is it the joy of building something? Is it seeing their technology become ubiquitous? Is it doing the right thing for their team? Everybody's doing what they're doing for a slightly different reason. And finding out what their why is is super. Helpful.

Are they doing it for the money? They got real passion for what they're doing.

And it's not that one's better than the other. It leads to different types of A approaches and then B, I have the, I'll say privilege of doing both the upfront work, the deal work and the integration work. So understanding what drives people and what their motivations are gives you an idea of whether they want to stay long term, what role they want to play in a big company. Do they want to be a technologist, do they want to be a general manager? Do they want to cash a check and then move to Miami and go to Art Basel? It's really important to understand motivations and what drives folks.

Get the story, figure out what drives them. And then that also gives you a sense of where they're going to fit in and the bigger picture of things. I always find it interesting to kind of bring up a deal, an acquisition. Is there a certain time when you do that? I've been approached where the person, the executive was so blunt and forward about it that it was such a big turnoff.

Totally.

And it was just funny because I've just worked in M and A, but never had that. And I was like, wow, this is absolutely the wrong way to do it.

Aren't you going to buy me a drink? There's got to be some relationship understanding. Now, obviously you get a call from a big company with a title of corporate development, you kind of know why they're calling. But it's also an understanding of at some point, especially venture backed companies. And the vast majority of the companies that I've bought have been venture backed. At some point you need an exit. And whether that's short term or long term, you definitely want to make sure you have the right relationships as an entrepreneur with the corp, dev and product folks at the five or ten companies that over time might be an appropriate exit.

Now, before I try to push to say, hey, we should look at doing a deal, there's this better together story, like the vision we talked about. Are you bringing that up this early in the first meeting?

Yes, because oftentimes people think about F5 and we're a 30 year old company.

Are you telling your story now? You've sort of got the person always. So you come back and saying, hey, I've built my expertise around doing M and A. I've worked at a number of organizations. I'm here at F5. This is what our current goal is. You just talk through what your mission is.

Absolutely.

And why you're looking at the space now. You're looking at adjacencies. This is what's drawing us.

This is what we're doing. This is our strength. This is why we think we have permission to play in this space. This is why our customers give us permission to sell them or talk to them about these things. And at the end of the day, how do we solve joint customer problems? Because that's the way people give you money.

Do you ever feel like you could tell that story and that target executive almost concludes that better together?

I hope that I am able to do it that well, because that's certainly the goal.

Right. Because there's a little bit of. I feel like sometimes when you're building the narrative that you could be pushing it a little too much. Using the executive here that gave me that direct. And it was almost like, I want to know the price you want to sell for, because we could probably get you this much, which would be. And I'm like, I'm already. Nice house and car. Money isn't nothing. I already got the nice house and car. That's not. And then you could be this chief Product officer.

And I'm like, I'm the CEO. Why is that exciting?

Exactly? It was like everything you could do wrong. I'm just like, no, I'm not interested in that at all. And that's.

I'm wondering.

Like, that play because it's a dance.

No doubt about it.

How do you sort of make sure that you don't get that? It's like you want that real alignment, you build that excitement. Or is there specific things in the 30 years that you. I want to learn your approach and how you do it.

You always are doing a ton of research before you do. Each call. You've gone through LinkedIn, you've read all their posts, you've looked at what blog posts they have. Oftentimes, I will have listened to a couple of their. If the CEO has done podcasts, if. If he's talked to other folks, you search LinkedIn to figure out if you have any joint friends and which ones you can call to get some background and information on. So you try not to go into anything cold. At the end of the day, it's a sales call.

How much time do you spend doing that for every meeting?

Between two and 10 hours.

Two and 10 hours, sure. That's a target. So especially if you have that, hey, this is going to be a really good fit. You're going to spend anywhere from two to 10 hours.

Well, the flip side is and that's one of the things that's fun about being in Corp Dev is versus all the other folks. This is my day job and I take it seriously. Lots of folks say, oh, when we do M and A, I bring in my CFO and I bring in the product guy and I've got a marketing person. We're great and we put together a tiger team and do it. That's awesome. But at the end of the day, this is a day job.

Are there things that you would say or do to flatter this target? I'll give you example. Like when I was CEO of Deal Room and I had to go pitch to F5, I would listen to your last earnings call. Now it's easy. I just throw an AI and be like, give me, give me some references the CEO or CFO made about M and A. And then I point that out and be like, hey, I see your CFO talked about blank. And then you're like, oh, this guy actually did a little homework. And it can even come with a point of view of like, oh, you know my assumptions. You're going to be trying to scale out the way you guys do integrations because you're planning to do a lot more deals. And that could be dead wrong. But at least you're like, but at.

Least you come in with a point of view. I had a CEO many years ago who used to say, point of view is worth 10 IQ points. And I would say, good, I'm going to have three points of view and I'll be equal.

Yeah, something if you don't have it because you're just coming in. And I felt like sometimes you get a little too much of that. You're just asking a million questions, but you don't come in with any kind of point of view. So that was my way to flatter. What's your way to flatter these target companies?

It's understanding where they're at, what they're doing, what excites them, why their space is important, what they've done to be successful and how that's relevant to what we're doing. And at the end of the day, it comes down to trying to explain the better together story. We've got 20,000 customers. Every large enterprise is an F5 customer. And we have permission to speak to them about infrastructure and security. What you're doing fits really well ideally with what we're doing. And here's the reasons why.

It almost sounds like you're collaborating that better together story because you're having this conversation and you're validating through them. Like when you say, what are these things that you've done? What are these things that you're aspiring to do? What are you really good at? You're surfacing those things. You have some of the structure, but you're almost like taking those pieces to complete that story. Because it's not like I'm just making that shit up.

No, not at all. It's exactly the reason that any good discussion is about listening and understanding and seeing if you can build a relationship where what both of you are looking for can come together. And if it can't, and by the way, 98%, 99% of the time, nothing happens, hopefully you provide some value to them, they provide some value to you. And I always end every discussion with, even if it's a short term discussion, anything I can do to help.

That's usually happens. This is more of an intro call. Maybe you just try to get this, get to know each other, know what the general goals and intention are. And then there's always people need this type of stuff. You want time to think about it. Nice to know you. Boom. Part ways cordially, like a typical introduction meeting. What happens after that? What's your philosophy? Do you convince people to sell or do you wait for them to be ready to sell?

You can't convince somebody to sell that doesn't want to. You have to understand what they're trying to accomplish.

Isn't that convincing them? Instead?

Part of it's convincing. Part of it's understanding what makes sense for both of them. So yeah, it's certainly convincing. Any sales job is convincing somebody there's a need and you can fill it. And in this case it's a, hey, you're doing this for whether it's money, whether it's broadening technology, whether it's solving really hard problems for customers, and we can help you do that at better scale.

There is different parts of convincing.

Totally.

I can help you get the deal actionable.

The other side is there's lots of times where it's, this is really interesting and we should continue the discussion. And it's not a no, it's just a not now, we're not ready, you're not ready. You go on, continue to grow, continue to get things. We'll learn more about the space and if things continue to align, let's continue the discussion.

Okay, so you have this intro meeting, you'll have some interpretation of where they're at. Like, oh, this could potentially be actionable near term or more Of a long term, that's how you frame your next steps. Where it's like, if it's actionable, it's like, oh, we should probably connect in a few weeks or we should probably loop in and continue the discussion. And then if not, it's nice to know you. But we still got all these things we're trying to achieve.

Absolutely.

And this and that.

And best of luck again, you want to be respectful of people's time. If there's not a good fit, hey, this was great. Thanks a lot. If I can help with something else, let me know. And in the interim, that space is one that's not of immediate near term interest to us.

What if it's something interest, but you can tell, hey, we're not going to do it because we got timeline for the next couple of years on these milestones. Is it. Let's just make a point to stay in touch once a quarter. Absolutely.

I'll see you at RSA in Black Hat. Look forward to having a drink. Best of luck. There are lots of companies that it's IPO or bust. We don't want to sell. There are plenty of CEOs that frankly don't need to sell and they don't want to. And you have to respect it and say, okay, best of luck.

So I remember losing a deal where in my head I was like, oh, I should like follow up this founder in six months. And I didn't. And then he got a deal done like 11 months later. I was like kicking myself in the butt. What do you do to keep in touch?

You have a CRM system. You have something that says, apparently I.

Don'T know how to use that very well.

My complicated CRM system is I put in Outlook, call this person in three months and have it show up. As a reminder, in three months you're supposed to call Kisan and see what's going on. It doesn't have to be wildly complicated. And the other side is if there's something that happens in the industry, I have Google Alerts on every company that I'm looking at and make sure that I'm following them on LinkedIn and on Instagram and see if there's something new that happens. And if there's something that is of interest, I'll send them an email. Hey, have you seen this? I saw this from you. Congratulations. Look forward to talking about it.

Ah, so you throw them on Google Alerts so that way you can all your prospective targets on Google Alerts.

I have the main ones.

The main ones, Yeah. I like that. And that if you see something, it's like, you can always use that as a way to get in. So trust is like the big thing. I feel like. How do you think of trust as. Maybe don't think of it as a strategy, but like, say you were. How would you think of it as a strategic approach?

Have a reputation for being trustworthy for the last 20 years and say you can meet a bunch of people that will know you and be introduced.

Okay, so that's your point of reference.

Yeah, I trusted you because Jeremy said, hey, he's a really good guy. You should talk to him.

That's good.

Yeah. I mean, it's the transitory powers of friendship.

Yeah.

If somebody you trust says, I trust him, you should meet him, you do it.

So you got these references. When do you use that, though? If you're like, hey, just so you know, if you. I've done a lot of these deals. If you want to talk to other folks I've done deals with. Like, where do you interject with that in terms of having your. Because there's people don't know you, but Jeremy knows you. So it's obviously through the association. Okay, there. There is trust there through that association. But you're approaching a target they don't necessarily have that was it more of. Can you imply that, hey, there's references.

Or you can certainly imply that there's references. Again, that's the point where it's always great. If you can say, hey, I was speaking to our mutual friend Neil, who was the guy I was talking to this week, and I've known Neil for 15 years, and he said, I really should talk to you and what you're doing is really cool. And then if the guy has a question, he'll immediately call Neil. Or ideally, Neil's already called him and vouched for you.

That makes sense. If you can get that the common contacts, using them as proof points. You're reminding me of a deal I need to follow up on based off of that, actually. Because there is somebody that's like, oh, we actually know that same investor I'm working on a deal on and should go back to him to help me kick him to get the deal going. What else do we do to build trust?

Run a good process, do what you say you're going to do. Follow up and don't waste people's time. It's about basic general respect and being a good person.

What about getting people drunk?

I'm a big fan. I mean that it is great to break Bread with folks. I can't think of any deal that went well that didn't involve getting together and having a meal. You don't really learn what people think until you've had a second glass of wine. And it doesn't have to be a second glass of wine. It can be a long walk. It can be seeing a ball game. It can be talking about what music you did or what'd you do over your Thanksgiving weekend and why was that cool and what was fun for you about it. You learn about what makes that person tick. And at the end of the day, people are people, and they want to know that you care about them.

That's true. There's time in having more of the. Like a personal setting to get to know the person personally.

It's huge. Especially when you're in due diligence and you're trying to figure out what's going on for integration. You've got to really know what drives each of these people.

And we gotta. Like, we're picking up on integration here. I like that one. I still like alcohol because I feel like it's a true serum.

I agree.

So, okay, with or without alcohol, Is there things that you've uncovered that kind of really, oh, by the way, I'm going through this really bad divorce or something like that. Is there stuff like that you uncover that all of a sudden you relay back to what the deal process is going to get impacted?

Absolutely. CEO that nobody in the company liked.

But you find out from the CEO.

No, no. You find out from the other people that you went to dinner with when the CEO's in the bathroom. My favorite example is seeing at dinner how the CEO or the other senior people treat the waitstaff.

Yes. Big on that.

I worked at a company called Modernizing Medicine for a couple years, and their CEO, a great guy named Dan Cain, if you walked into the building with him, Dan knew the name of every person at the front desk who picked up the trash, who worked in the building, who was at the coffee store, and you just knew that he was a good, caring, nice man. Those tiny little details that you don't think matter make a ton of difference.

You're picking up on the culture cues, too, which I feel like we do a lot of these podcasts, and it comes up so much when you think about integration. And speaking of integration, I'm almost convinced there's three schools of thought. Maybe there's a fourth. I forgot it. One is the old school. Hey, we're just going to put these companies together and they're going to figure it out and create a new unique culture. Old school. There's more of this progressive of we really want to understand this culture. Not necessarily oh we shouldn't do the deal because this is different. But this will help us shape our integration strategy. Knowing that certain functions would probably we could fully integrate. Some are going to be uniquely different the way they operate. Maybe we should add them independent. It really helps you shape your integration approach. And then I've seen companies like Barry Webmiller, LCI Industries. Yeah, Jason Lifford runs that company where they're using their culture as almost like the driver of hey, just so you know, this is our culture and this is how we're going to change your company to fit our culture. And they bring in like coaches and things to just get their leadership on board. And this is pretty interesting if you haven't read it. I think he just updated his book Bob Chapman, like why Everybody Matters. But that's the other school is almost using as a strategy of culture. Where do you sit on that spectrum?

It's important to understand both companies cultures and then figure out how to get the best of both at the end of the day. And again, the vast majority of the transactions I've done have been small to medium sized transactions where it's unlikely that a small company is going to come in and totally change the big company's culture. Whether that's for better or worse. It's very different if you're doing a merger of equals where you do have to pick one culture or really adapt the two of them. For us it's been mostly making sure that people understand what the culture of F5 is and if they're comfortable joining that. So I'd say for small to medium sized deals you gotta figure out if they're a cultural fit for a larger deal. It's a very different discussion. That's really an integration, not a bringing it in and figuring out what you're gonna do.

You're almost prepping them in a ways to be amenable to some cultural changes as they become part of F5.

Yes.

Versus oh I promise you all the autonomy and you're gonna preserve your culture and do everything just like you are.

And there have been times where you do wanna keep things autonomous because it's a small company going at a super high velocity and you don't want to slow that down with the traditional big company, accoutrement of process, et cetera. So you really have to figure out the best of both worlds. But a lot of that is really spending the time during due diligence trying to figure out what the appropriate integration strategy is. I'm a big fan and my team hates it because they're sick and tired of hearing me say this. But due diligence does two things. It's binary, up or down, do we do it or do we not do it? And the rest of the entire due diligence process is about integration planning.

How's your approach? Because we oftentimes use the whole buyer LED framework. It's all about creating synchronization between diligence, integration and essentially it's just integration forward. What does integration thinking look like through the process?

Really understanding that all the information you're getting is to help you figure out how you're going to be able to create value. What are the main value drivers that you need to.

All your diligence is all about integration.

It's confirmatory. By the time you get to due diligence, at least as a strategic, you understand their technology, you understand their strategy and you believe you want to do it. I've never gone into a transaction wondering if I want to close it. I want to close it. I want to confirm that the assumptions that I have made are correct and that's the go, no go. But everything else is, what do they do, how do they do it and how would it fit with what we're doing? What are going to be the value drivers going forward?

That's interesting. And then you get aligned on that and then you're working. I mean, so the target company's aligned about how you're going to integrate, foreclose.

Absolutely. There should be no surprises when you go through this process. And part of that is explaining the day we sign an loi. We walk through the entire due diligence and integration process with the company. So they understand timing, they understand who's going to be doing what, they know what our process looks like and we're all aligned on expectations.

Pretty detailed plan.

Yes.

That's what you miss out when you have a seller led process. There's only focus on closing the deal. They compress all the timelines to close as fast as possible and with high certainty to close. But here's a strategic you want high certainty of value generation. So for you, the big focus is how things are actually going to come together and make sure there's true alignment between both sides. All the folks essentially are coming together as one team.

At the end of the day, they're very different processes. I've lost lots of deals to PE companies that can move so much faster than I can because they're mostly numerically driven or they have a thesis. They're willing to take very different types of risk and underwrite it differently than a public company can. They can get things done much faster. They can get a different certainty of close. But it's a different process for what the future is going to look like.

Because it's just, boom, go figure it out. Because the P firm will close and give it to the business and say, all right, go figure out how to integrate it.

That's the difference between a transaction and a relationship.

I've heard the stories of how that goes. Oh, yeah. What's really interesting is what we described of building trust. This is pre loi. You're building trust and you're already starting to think of how some of these things you're learning is going to impact integration. Fire lead, baby.

Absolutely. It's the reason why you spend so much time together. It's to get as many data points as you can and learn as much as you can. Not just because it's interesting and fun to put together the puzzle, but because it just helps you do a better job, make better decisions, and build more value.

My new book, Buyer Led M and A. The framework is officially out over 400 episodes of M&A Science. I've talked to the best corporate development leaders in the world, and one thing is clear. Traditional M and A is broken. Buyers chase auctions. Sellers control the process. It's reactive and inefficient. This book takes those conversations and distills them into a practical framework for how to flip that source deals directly, build relationships earlier, and stop being auction chasers. It's not theory. It's what leading teams are doing right now to increase deal volume and take control of their pipeline. If you want to build a proactive M and A program that founders actually want to engage with, grab your copy. It's available now on Amazon. Head to dealroom.netbook to check it out again. That's dealroom.netbook.

Okay, so we go through this journey. You build trust. And we get to that point, it's like, hey, look, we want to see an offer from you. You get to the point of getting an offer out there. I want to know about negotiations. Because you made this point where he said the harder negotiations are actually internal negotiations versus the external. Or with the counterparty. Talk me through that.

The negotiations internally about whether or not to do the deal, not about the actual price internally. Nobody cares.

Okay, yeah, Negotiations, Negotiation So making a go no go decision. Give me examples like walk me through that. How does that go down?

The big internal go no go decision is about issuing the LOI up until the LOI point.

This is why strategis is slower than PE.

No doubt about it. PEs also don't run an operating business. That's their job. They're just doing these things. So it's very different for us. I've got to convince people that have day jobs that are reporting their quarter, that are building their product, that have an annual plan that they should mess with that. Peter, bait it, spend a bunch of time and do something external instead and convincing them that what a lot of the process is spending time with them upfront, understanding their roadmap, understanding what they're billed by, is understanding what they need. And if it's something that they need and can't do internally, obviously it makes an awful lot easier to get a transaction approved if It's a. When F5 bought Nginx, spectacular transaction, been very successful. There was an internal product that was doing the exact same thing.

Oh, interesting.

Convincing internally, both management and the team that it's better to buy an external product and no longer do what you're doing internally is really hard.

Let's case study that for a second because that is really interesting and I've always been curious about that. You have an existing product and nginx is. I mean I've. We've used it of course. Yeah, I don't know if it's still in our stack anymore. But yeah, a great product. So you get the opportunity. How do you do that?

You recognize what the skills it takes to get from where you are to where you want to be and do you have those skills and market internally. Another example and really recent, we bought a company very recently called Calypso AI in the AI security space. We had an internal AI gateway product with a non trivial number of people working on it. It became clear to us that while we had great engineers and great technology, we didn't have the AI and domain specific expertise to really understand exactly what the market wanted. So we ended up buying the company and then taking a number, the vast majority of the internal team and moving it over into the Calypso team and merged. Hopefully we'll get the best of both worlds.

Reverse integration.

Yeah.

Talk to me the negotiations, are you talking to product leaders and are you convincing them?

Absolutely.

I know you got a little hope and dream here, but ideally you never.

Want a deal to be only pushed by corp dev. You need to have a product and sales co sponsor. And by the way, the CEO and CTO should not be those sponsors because they're way too busy to be able to do the rest of the work. So I want a senior product manager who owns that space or will own that space. And if it's a revenue based company, not just purely technology, I want to have a sales co sponsor. If we're going to sign up to a number, somebody in the salesforce has to sign up to that number because a number that doesn't bring around incremental.

Quota is not a number you want real ownership of.

Everybody's got a sign in blood, maybe on the dotted line. Blood sounds a little bit harsh.

Yeah, that is interesting. Here's all this negotiation on alignment. I'm curious if you had like a defined M and a strategy. Like if you used either of these examples hupso nginx and you know, it's like hey, we already had this strategy was defined and we're executing against it. That's why we have this opportunity. Or is it more we've identified it and now we need to justify this and maybe shape the strategy. If like you found the opportunity and then you got to go back and convince internal stakeholders like these product leaders, is it more of like we have a loose strategy and then we're still rationalizing this particular one?

If your M and A team is that far out ahead of your product guys, there's not good strategic alignment within the company. So you need to understand what the company's strategy is and what the company's ability to execute is.

So you probably had that alignment before you went out and really shopped around, talked to the target. Okay, okay. So this negotiation is even happening beforehand. And this is your negotiation to really shape your M and A strategy.

In AI security, we knew it was an important market. We took a bunch of internal resources to begin working on it to learn and understand. And then as we were learning and understanding, we realized we don't have enough of these resources internally to be able to do it. We're going to have to do this in a combination of organic and inorganic.

These are the harder negotiations much than.

The target because it turns out the team that's developed it internally also thinks their baby's really cute.

Any specific things? Have you learned to really drive that? I feel like you could have somebody stubborn. I tell you the deal room culture over there anytime I found something where it's like hey, we can just buy this ip. They don't have a strong customer because we're small. It's 10 million revenue company. So you're looking at these couple hundred grand. You can go buy the ip, but then the engineers are always like, we'll just build it. You can build.

How long does it take? Are your engineers busy?

Yes, exactly.

It's software. You could build anything.

So that's right. How do you end up convincing them? Teach me.

It's what's the highest and best use of your time and if it exists, why recreate the wheel? It's time to market. Yeah. It's always easier to integrate an internal product than an external product because it's built with your tools. But you also can't do.

That's the argument. By the time we integrate it, we could have just built the whole thing from scratch.

Which is the question of one of the reasons why that internal negotiation is really hard. Because you also have to understand, it turns out if the integration is harder than building it yourself, then build it yourself.

So you have to grip.

That's part of that build versus buy. That really is important because it's build and integrate versus build, which is usually by definition integrated versus buy and integrate. It's a full process.

Do you have like product leaders, but then do you have like senior engineering that have a voice at this too?

Absolutely.

They're the ones that want to go get drunk and figure out like, how do I.

And you also have to have a CEO and a management team that understands the pros and cons of that. One of the things with the AI gateway and some of the products, when we decided that we weren't going to continue to do that internally and do it externally, you know, if you message that internally as, hey, we failed internally and we're going outside to buy it, then everybody's really pissed off and it's bad. But if you explain, hey, we spent six months learning what the market needs, understanding requirements, and then determining where the best way to meet those requirements are and celebrate it as a huge win, even if it means you're no longer doing the internal product. That's creating a culture of innovation.

Interesting. Build versus buy. It's interesting because it's almost like a little red team, blue team exercise there always.

Yeah. And different people have very different opinions on which one you should do. Turns out engineers like to write code.

They do. So I guess technically you're the red team because you go buy something.

Exactly. The flip side is, especially in today's environment, yes, a big company can build pretty much anything it wants, but it's not like we have engineers sitting on the sideline waiting to do something. Everybody's fully committed.

There's something else they can do. Is it the biggest element of that business case? Time to market, speed.

It's time to market. It's speed, it's skill sets and it's opportunity cost.

Okay, so you build all around all those pillars. All right, there we have it. That's our framework to assess build versus buy. When you have to make this go, no go decision, what is that framework triaging all of that look like? How many platforms do you guys have at F5 right now?

Three main ones.

Three main ones. I'm wondering if it's prioritized mandates between different platforms and then within that, how do you quickly get to. I guess more so like a no.

Than yes when you're in due diligence or when you're actually triaging new ideas.

Oh, it could be both. Actually. I didn't even think about the new ideas. That's the whole thing and I guess that's more the strategy exercise. So strategy, let's go run through both to go from ideas and then deals.

So ideas are. We are always the front line when things come in and try to do that triage as quickly as possible. If a new idea comes in a it's up to the corp dev folks to understand does this fit with our strategy? Is it a market we are interested in? Does it fit the big criteria? And I will tell you, bankers and companies appreciate a fast no much more than a long maybe because you're not wasting people's time. And again plays into the reputation of having a good user interface. The other side is knowing your tech stack, knowing your roadmap and being able to say yeah, this makes sense. It might be a little orthogonal or a little bit out there, but it's worth the time and expense of getting product and engineering folks to spend an hour to learn more about it.

That makes sense. This is actually fun. I keep using the deal room reference, but I get to work across like 200 corp dev teams which again like one extreme is just. You almost feel like they're just gut decisions. And the other one, I've seen the most sophisticated scoring systems you can ever imagine where they're just like 30 different.

Little 30 different variables, one to 10 on each of them.

Exactly. What do you guys do? Is there sort of a metric driven system to get to that no go decision?

There's a metric driven system when comparing similar companies. If there are four different companies in a space I would like now work with the product and sales folks to say, what are the decision criteria? What's important to us? How do we assign relative value to each of those rankings? You come up with a numerical way to look at these things based on those decision criteria. At the end of the day, it's a gut decision that's made with the entire team. But being able to actually put down the decision criteria makes it much more of an organized set of discussions.

Is it a 10 point list?

Yeah.

Oh, yeah.

We've got a 10 point rubric that comes up and says These are the 10 decision criteria. What's the relative weight for each of them and how do we compare? And it's helpful. It usually isn't the final decision maker, but it definitely helps knock out things that don't actually make sense. Once you figure out what are the really important criteria.

Who are the stakeholders to make the no go decision?

We go through in front of our ELT after due diligence.

Wait, what does ELT stand for?

I'd like to say Executive Leadership team, but I also call them executives. Lettuce and tomatoes sometimes. So it's basically the CEO and the executive staff. When we are finished with the preliminary due diligence, we will have each of the. We have five different tracks. Each of the track leaders puts together their report with a go no go recommendation. And we go through the report, the highlights, any red flags that come up in each of those groups.

Each executive comes with the each of the five track leads with track leads from the CEO.

Hr, Finance, Product Sales, Marketing.

That's who makes up the elt.

That's who makes up the due diligence tracks.

Okay, so you got your due diligence. So this is your functional leads.

Functional leads and the go no go meeting.

Ah. So the functional leads come up with their summary. So they do their diligence and they come up with this. Now this is pre loi.

No, this is after loi. After we've done the deep due diligence. Okay, so this is the go no go for this transaction.

There's go no go at loi. Yep. And then there's go no go at sign.

Yes.

Okay, so let's break that down at loi. Who are your stakeholders?

Product leadership, CEO, cfo, myself and the coo.

Okay. Pretty tight tent. Yep. About four or five folks there.

Yep.

And then now we get into actual sign where all these functional leads come in. Absolutely. They got diligence readouts. What does that summary look like from the functional leads to do a no go. Is it. Are they Kind of referencing, hey, based on this, to our diligence.

There's a specific due diligence report. We've got very formalaic ideas of what it is with highlights and color codes. And if there are reds, how are we going to address it? As we go through during the due diligence, we say, hey, if there's a red flag showstopper, you raise that day. Because we don't want to waste any more time and energy if somebody finds something that we think is going to stop the deal. Doesn't happen very often, but when it does, we want to stream and make sure we address that asap. And then when we get to the end of that due diligence for the go no go decision, each of the functional leaders presents their findings to Corp Dev and the elt.

Is integration any part of it?

Absolutely. They're one of the stakeholders. There's an integration report as part of that go no go.

Do the functions mention anything on integration or is that all strictly through the integration team?

I mean, the integration is a function of the discussions that have happened with those leaders. And most of those leaders are going to own their individual integration processes where.

They have a concern around integration that they would raise as part of.

They have an obligation to do that. Okay, we let them know that.

So part of diligence is here's diligence exercise to minimize your risk. But there's risk that corresponds with integration. They will bring that up there.

It could be a great company, but we just can't integrate it.

Okay, you get all these readouts that essentially are their summaries of a go no go decision. So they ultimately say, hey, we should do it, we shouldn't do it.

Everybody has to vote. And by the way, it's not just the track leads. We make sure that at the end of each of the groups we specifically say anybody. And it's a little bit like a wedding. If anybody here has feels they need to say something or that their perspective hasn't been heard, please let us know. Because we don't want there to be anybody that says, oh, I meant to tell you that beforehand and I didn't want anybody to have that excuse. If one person says, I disagree with this vehemently, we want to make sure that we have the culture and the availability for them to speak up.

Is it like a democratic vote? You just got to get majority or no?

At the end of the day, it's the ELT and CEOs decision, but it's based on that information.

You have a deal where they've had several people object to it and they still move forward with it.

Yes.

How does that pan out?

Obviously it depends on why they're objecting, but oftentimes they're objecting because they think they can do it better themselves or their competing priorities. And the end of the day that's the type of decision that a CEO needs to make of do I want to focus on this or do I want to focus on that? Because there are always limited resources and the opportunity cost of people's time. Even a small acquisition takes a ton of time and energy internally. So you've got to make sure the juice is worth the squeeze.

So they got votes but the ELTs.

Got the corporations are not democracies.

Fair enough. We talked a lot about integration and I like how you start cultivating this stuff when you build like your deal thesis. Is having a thesis on integration part of that? Like absolutely. What level of detail do you get at the loi?

We want to have an idea of what we think the integration strategy is. Obviously you haven't gone and understood it in great detail yet, but you've got to have a thesis for what it's going to be and people have to agree that it makes sense.

Can you give me like a rough like what is it just pretty broad or if you kind of identified that there may be some challenges.

Yeah. The things where it become interesting is hey, this is a very different culture or this has a different business model or we are an enterprise direct sales business and this is an sm. I'm making it up an SMB PLG.

Salesforce seeing integration challenges. Yeah, you have to making that part.

Of their and we've also done a really good job of spending a lot of time doing after action reviews of every deal and putting together the criteria that are important for F5. The companies that we want to work with definitely have to be able to scale to enterprise because our biggest customers are enterprise and our biggest asset as my CRO tells me all the time is our customer base and the faith that they have in us. We sell primarily to netops, secops and a little bit to DevOps. So if it is a bottoms up open source PLG motion sales that is selling to cloud native new companies doesn't make sense for us. It's not going to fit with our model.

Okay. It helps flesh that out so that way you get ahead of it and then make sure you got a solid.

Case and absolutely got to have your decision criteria and understand what knocks things out up front.

The sooner you get to it, the better. Much sweeping things under the rug here.

Even if it's the greatest technology in the world, if it doesn't fit or team, if it doesn't fit with what you have permission to do, doesn't make sense for us.

You mentioned before we talked that you'd rather walk away from a deal than compromise on your core principles. What does that mean? What are your core principles?

Treating people ethically and fairly and doing the right thing.

Okay, what happened? Give me some exam.

I know.

Now I want to know.

Yeah, we were in a potential transaction where. And again, everybody has their own perspective. We had signed an loi. It had been approved by our board and the board of the other company. And then as we got to the end, the other side decided they wanted to renegotiate both price and terms. And one of the things that that included was changing the articles of incorporation and the cap table basically to take more money for the preferred versus the common end employees. And it actually didn't dramatically affect the economics for F5s, but it would have not treated people the way that they were supposed to be treated. And we said, we can talk about renegotiating.

Oh, this would have diluted all the employee shareholders.

Exactly. But we can't agree to something upfront and then you change it at the end and hurt other people. We're not willing to have F5 be associated with those types of business practices. And if we have to walk away and start again, we'd rather walk away and start again than compromise on those beliefs. By the way, that's one of the reasons that I really like working at F5, because in fairness, I had spent a bunch of time with lawyers that say, hey, if they do, this is how we can be indemnified and this is how we don't have to worry about it. And this is how we. If something happens and one of the shareholders sues, this is how we get back. And our management team said, that's great, we won't touch that. It's not a money issue. It's a reputation.

Yeah. On principle. That's cool. I like that.

That was one of those really defining moments of, oh, this is why it's a company I want to work at.

I like that. Can you tell me about a fail deal that you turned around?

Sure. We bought a company many years ago. This was when I say we. I was back at Citrix Company called Ardents. Gosh, this is 2008. 2007 was the deal. Really interesting deal. We got one piece of technology that we really wanted. Provisioning server. But within that business there was a small little real time operating system. Business didn't fit with our strategy. And every time we were going to do something where headcount had to come out. Let's just take it out of there. It's not strategic. And we realized that there were a bunch of big customers that were using it. There were 30 or 40 people in the business and we weren't going to do the right thing for them. We were just going to drive it to zero. So we said, what can we do versus just writing this part of the business off? It was 2008, it was the financial crisis. Nobody was funding things, There were no buyouts. And we ended up creating a management spin out. So actually my favorite deal of all the deals I've done. We got the head of marketing and sales from that business to give up his big company job, put in his life savings and buy out the business. He fundamentally believed in the technology. He pitched it. We were looking at selling the business. We couldn't find somebody to buy the business. And he said, he came to us and said, would you consider selling it to us? And we were like, you can't afford it. We came up with a really creative financial structure. He took a bunch of risk. We spun it out. It was a very tough time. They went from 40 people to 25 and then 22 and then built it back up. And 15 years later, it's a standalone, really viable, profitable company.

That's cool. Yeah.

I'm going to Boston next week to do a board meeting with them.

That's a good spin off. May I run into you? I go to Boston week after next week.

Awesome.

Yeah, that's actually worked out really well.

Yeah, it was really win, win, win. Which is very unusual. It was good for the employees, especially.

The persons in the business because I know there's a lot of firms, I don't want to knock anybody. Carve outs are great opportunities and strategies. But like when you're just banging on doors looking like what do you got carve out? Hey, actually how many times a month do you get approached by, I wanna know who do you get approached by? Who's knocking at your door? Between consultants, bankers and the P firms looking for carve outs, we probably get.

Two to four divestiture. Carve out calls a week.

A week. Okay, okay.

And it's funny cause sometimes. And again, I give business development folks lots of credit. They're sales folks and they're trying to. They're working Hard. If I say no, everybody on my team will get the same email or LinkedIn saying, hey, I'd love to talk to you about this. So I was like, hey, here's the list. We're not doing carve outs. If we do, we have you on the list and we will definitely let you know.

So you get two to four on the carve outs. How many from consultants bankers?

Oh, we probably have a group of 10 to 15 bankers that we work with regularly to help understand what our strategy is so that they can be proactive looking for the things that we're looking for. And we obviously have a couple big relationship banks that we work with and have done a lot of work with us. And then you never know where a good idea is going to come from. So we'll talk to. I'll spend a half hour with most bankers or VCs that want to understand what we're looking for and what's important to us.

What about consulting firms?

Not as much. There are a bunch of smaller advisors that want to understand what we're doing, but not a lot of consulting firms have come. At least I'm sure they're bothering the product folks and the engineering folks, but less the corp dev folks.

You know, that's what this whole podcast about. It's to get you in a funnel to find your next carve out. So I'll whatever it takes.

By the way, if it doesn't work with me, I'll give you the names of the rest of my team. You can talk to them too.

This is the M and A Science carve out podcast. Exactly. And then I want a hundred percent financing. These carve outs by the way, of course.

From the family.

Exactly. We've got a good payment plan around the business and then I'll run.

What would it take to get you in this carve out today?

I'm just thinking 30 years. All the deals you've worked on. Anything you want to teach me? Negotiation stuff, just anything. Like what's my big takeaway before we wrap up?

The biggest thing I'd say is transactions and meetings are short and careers and reputations are long. Do the right thing, give first, provide value. And over time it'll work out.

That's true. The best I've seen careerwise is that provide value, give first. Even the best attorneys I've ever met in this industry, they've always had that. They literally told me. I remember one specifically. I was just blown away by their office. I could tell this is a big time lawyer and I asked Them. Which was your driver of success? Pretty young. Early my career. He's like, I always just believed in keeping value upfront for free. And I just would offer clients to do half a dozen hours.

Remember me when you're big and successful, because you do. Right around the corner, there's a firm, Akerman Centerfit. They're not the F5 lawyer. They were a lawyer I worked with previously. Guy provided a ton of value when I needed it. And I will never forget that.

Yeah, it does. Absolutely.

The only other thing, and it's less for corp dev folks than for entrepreneurs. Expensive banking, accounting and lawyers are worth it.

Accountants, bankers, lawyers.

If you don't have your financials in good shape, if you don't have your documents in good shape, if your articles of incorporation aren't in good shape, make sure they are before you have these discussions.

100%.

Oh, God, it's such a nightmare. And yeah, M and A lawyers are expensive, but bad lawyers are much more expensive in the long run.

I agree. Yeah, it's finding the right ones, I think too, like dialed in with you. Like you talked about culture and the industry.

Yeah. They got to understand the problems. They're unique. No matter how smart an entrepreneur is or a CEO is, they might sell a company once, twice, three, maybe four times in a career. I do four deals a year. A good M and a banker or M and a lawyer is going to do 10 to 12 deals a year. Really good experience is worth it.

What's the craziest thing you've seen at.

M and a prima donna? Founders who tell you, oh, this other company was just bought for a billion dollars. I'm worth a billion dollars. And I'm like, did somebody pay you that billion?

No.

Then I guess you're not worth it. There can be some really crazy expectations, especially during bull markets like we are now in AI and the other side is the pendulum between fear and greed. Man, it moves quickly.

That's so true. You go from one extreme to the other. That's why I'm always conscious about that. You know, the market goes in cycles.

Well, you know the market goes in cycles because you've seen it. If you haven't lived through it yet, you don't have that learned experience.

I talked to a founder that did 2021 raise and he's working on his next round. And it's almost impossible, I bet. So tough.

I call it the When Bad Cap Tables happen to Good People. It's really hard.

He's done well from that time period, but it's just like you're sandbagged so much.

Oh, yeah. And then I've looked at a bunch of companies that had $20 million of ARR in a hot market and were growing fast and raised it a billion dollars. And we're all excited because they were unicorns. And then three years later, the markets changed. Maybe they even grow to 50 or 100. But now their company's worth a market multiple and it's worth, I don't know, 3,400 million. And they've got a cap table that says they're worth a billion and a half. How do you do a deal like that?

Still gets me. I see a lot of these, like first rounds that are 5 million to 50 million and it just in my head I'm like, oh my God. Like it's a skill of capital allocation is what it comes down to. And it's just a first round with that much during an early stage. It's just, it's so hard to do. I get it when, okay, we got a 10 million revenue business and I understand where that capital is going. I understand, like there's a bit of a formula here. If it scales like we're in great shape, there's a little more predictability. But we don't have five customers. We just raise 8 million bucks.

It's hard to grow into that.

Yeah, yeah, but. And again, it's the prima donna. You got this. We're worth a couple hundred million now and no doubt about it, give me that Porsche and access to the private clubs.

Exactly, yeah.

Stay humble, stay hungry. I think was the famous from. Hey Andy, thank you so much for taking your time.

Thanks a lot.

Taking a break from deals to helping me become a better M and A scientist.

My pleasure. And thank you for teaching me. Thanks man.

Hey, those of you still listening, I am amazed. My fellow M and A scientists brothers and sisters reach out to me. I love to hear feedback. What did you think of this podcast? If you have any feedback from me, criticism, I'll take it. So I get better at this or other topic ideas. I'm trying to expand now that I'm on full M and A science carved out operating as independent company. I want to make this the best out there in the world when it comes to buy side M and A. So give me some ideas. Till next time. Here's to the deal.

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