How to Build an M&A Team That Can Support Multi-Vertical Strategies

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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 MA Deals Foreign Science Live, where leading M and A practitioners share lessons learned from their experience. When you use proven techniques in M and A, more value is created. If you're interested in keeping up with the latest from M and a science, visit Masscience.com and subscribe to our newsletter. You'll also find tons of free resources on the website. Again, that's mascience. I'm your host Kisam Patel, CEO and Founder of M and A Science and Deal Room. Joining me today is Eileen Holderness, Head of M and A at iac. Today we're going to talk about hiring an M and A team and supporting multi vertical strategies. How are you doing today Eileen?

Doing well. Thanks for having me.

Keithan My pleasure. Could we kick off with just a brief background on your M and A experience?

Sure. I joined IC just over a year ago and my background is in private equity and investment banking. I'd been investing in consumer companies primarily for just under a decade before joining IAC and I was really attracted to IAC for its track record in building industry leading consumer Internet companies. IC is such a unique animal. Candidly, I didn't know much about it before this job opportunity found its way to me, but I'm so happy that I did. It's a publicly traded holding company that has built many brands and companies that you and I would know as consumers. Nash.com, angie's List, Vimeo, Expedia, just to name a few. And the M and A team is integral to ISEE's growth. We help the source diligence and execute acquisitions for the businesses we operate and identify opportunities in new verticals.

You're in a lot of different verticals so I take you don't get bored easy over there.

Not at all. And always searching for the next leg of the stool. As I said, consumer companies and consumer Internet is abroad investment mandates. So always thinking forward and Industries where we see offline to online transition, where we see inefficiencies that we can disrupt and where we can build really big businesses.

One of the big items you were tasked with at IAC was building on the M and A team. Can you walk me through your approach?

One of my goals was to build a strong, high functioning team. It's a very exciting time in IAC's history. We're in build mode, we're sitting on 3 billion of cash. We're about to sit and often looking for companies that will fuel the next leg of growth. So looking for that hungry self starter, someone who has demonstrated some level of risk taking in their careers and has a growth mindset. As we look to build the team talent and people who would really take the opportunity at hand and run with it, be able to work independently, but also collaborate with the rest of the team. That's what I was looking for. I think that I had a lot of help in that. Our recruiting team is led by an ISD industry vet, Laura Sapp, who's been here for 20 plus. She helps me look for and really articulate why she's different and what types of people and what skill sets really fit within our ecosystem. So my approach was to work collaboratively with her, of course, taking the feedback of people who have sat in this role before, but really go out there and see who was attracted to the current mandate and find the best people we could.

When it comes to getting the culture match, what are some of the unique things that really stick out when you're looking at candidates?

I'll start with one of the important things that actually our cfo, Glenn Shiffman, when he hired me and within the first couple of months I started in the seat, he said, you really don't hire someone solely based on their experience and capabilities. Today you're looking for future potential. That's what you're hiring. How can you suss out a person's ability and desire to grow, learn and evolve beyond what they've been doing for the last 10 years, five to 10 years depending on level of maturity we hired into our team. Of course there was requisite skills that you needed, educational and requisite experience. But we did look beyond someone who ended up being a great hire. He didn't have consumer tech experience in his resume, but you could tell there was that genuine interest and passion for what we were trying to accomplish, what the history and legacy of IAC was. Sometimes people overlook and focus too much on resumes and what can be demonstrated in words. But when you speak to someone and look across the table and ask them tell you about a company they find interesting and why, you can tell if they have a vested interest or they're just speaking academically. So I always ask, would you put your own money and bet on this company? Would you quit your job to be part of this company? And that's the type of conviction I like to see in a pitch. You can sense genuine interest in a video call from someone. If that's coming from a place of.

Passion, that's really cool. Is really looking for that common level of passion and common goals as well. When you go through the process of assembling a team, what's your approach to really getting the right combination of skill sets to come together?

The word diversity is used a lot. And building a diverse team doesn't really just mean hiring people with different backgrounds of race, ethnicity, socioeconomic diversity of thought and experience is something I think about often. So that comes across based on someone's personal experiences as well as their work experiences. And it's so important to what we do here at IAC Group. Think it's a pretty scary thing when you're investing in tech companies when the pace of innovation is so fast. So we try to avoid getting into these overconfidence cycles where we think we know based on something that happened five years ago or something that just worked for us. Bringing people together with diverse experiences was something that was a priority for me. It's overlooked sometimes that someone's personal experience, having grown up somewhere or maybe done a stint that doesn't fit into the perfect cookie cutter path gives them an edge or gives them a different way of looking at something they can contribute around the table. A lot of our investment committees end up being spirited debates where it's a free forum based on what you read and what people can contribute freely around the table with our most senior execs and you really see how people with different experiences consume products and services differently. That's part of something I always set out for. Trying to hire people that won't have the exact same experience when looking at a consumer product or had a different experience with homeownership growing up or with an insurance product have different perceptions and beliefs because of their very place of growing up and what work experience they have.

So you're not laser focused on just hiring Goldman bankers and Harvard MBAs.

Yeah, it's a tough one because having come from the world of investment banking, I do think great training comes from many of those institutions you mentioned. Rigorous and Very technical skill sets are developed at places like Goldman. I worked at Citi in my first year post graduating college and I wouldn't give up those experiences for anything. But I think that a perfect example is there's some folks on our team who come from very similar backgrounds. Investment banking. Did private equity know that skill set? We don't need 10 people who have the exact same skill set and career path and we have purposely looked for people who have an edge or a difference of opinion. As simple as worked at a public fund as opposed to a private fund, has experience doing something entrepreneurial, has experience working at a startup. These are things that really jump off a resume page for me because it shows a level of risk taking, it shows a level of just breaking off from the norm. I think a lot of us do have actually investment banking backgrounds for a couple of years but we've had squiggly lines getting to the ultimate end goal of where we are today. I find that to be a huge value contributor to the debates we have at our investment committee.

This might be redundant but what are key things you're looking for when you're searching for people to join the team?

It's a topic I really talking about because I think it's so important at changing. I'd say a couple things I'll repeat some of the ones growth minded and growth oriented in nature. So people who are willing to accept that what they used to think they knew perfectly may no longer be true so hard to articulate. But you can get at these qualities by asking someone how they think about the future of an industry. For example, let's say someone has on their resume they spent their entire career, someone like me looking at consumer retail. What that meant when I was an analyst was mostly offline businesses. Multi unit retailers spent marketing to ultimately drive consumers into their stores to purchase goods. Obviously over the last 10 years that has changed dramatically. He spoke to someone who was in the same spot as I was 10 years ago. Consumer retail is a completely different paradigm now. Online is a huge push E commerce how you attract customers in new channels due to social media, the growth of social media as well as search engines. There's been so much change in industries but I think there are some people who and this is dynamic by the way people can change the way they think about things are so eager to learn about what's changing and question rethink what they know and. And there are people who are really hesitant to rethink what they know because it makes them uncomfortable. It's a learned skill set. For sure it makes people uncomfortable to learn new things, but I always look for that quality of being able to rethink or question yourself and enjoy that process of questioning because as an investor that's what prevents you from going down an overconfidence cycle, making a bad decision because you think you know the answer when you haven't thought through every variable that could change your perspective.

Some of the stuff you're describing sounds like the entrepreneurial mindset where you're constantly looking for the don't knows and you're developing this quick learning pattern around it. And also that whole thinking out of the box, the non conventional ways to think about things and problem solve.

I just read Adam Grant's Think Again and so probably some of the nomenclature I'm referencing is overly inspired by that book which I thought was really riveting and actually made me rethink many of the things I thought to be true, which was delightful. And he has this great part where he says I'm going to butcher it, but you should delight in being wrong. And as a very type A perfectionist person, he's dead on. And people like Seabright have a thesis and then prove it correct. That's why there is confirmation bias. But if you can trick your mind into being delighted by being wrong, you learn so much more. Because you don't learn anything from being prudent, you only learn when you're wrong. And that just really struck a chord with me when I read it. And it's something I made mandatory reading for everyone in my team and I think all investors should put that hat on when they're thinking about new industries, especially in industries that are changing and evolving so quickly.

I like that mantra, taking pride in being wrong. What was the name of the book?

Ian Think Again by Adam Grant.

I'll have to check that one out.

Yeah, I think you'd enjoy it. He has a couple of key messages in it, but that was a major takeaway for me.

Where do you find talent?

It is so cliche. We do find it and we use LinkedIn a lot. It can credit that you don't need to go down a traditional path to find people. Generally people who are interested in your company apply to roles that you put out. That was a learning for me. Certainly I was wrong. The world I came from was always using external resources, having very curated lists of analysts. And you can only find good talent if you went to a subset of recruiters and very mind curated group of prospects. But we've gone very broad or at least I've seen from the outside in and working with our internal team that I referenced, led by Laura Staff, that you can find talent in places you wouldn't normally look. Folks who are off the beaten path, who are interested in potentially making a career pivot, or have come out of business school and tried their hand at something and now want to get back in investing. These should not be dings on people's resumes. Right. I think risk taking should be rewarded in institutions who embrace that. And companies who look beyond people who have just followed a very step path can find people who can add a lot of value to their team because they are risk takers and have done something maybe outside of the box.

So LinkedIn, great platform, a lot of people. It sounds like you're not doing too much of the passive hiring where you're constantly looking for people and saying, hey, are you ready for a new challenge? It's a little bit more of posting ads and letting people find you that.

And I'd be remiss if I didn't mention we have a great referral program. We have a large network at IC ever evolving, and we definitely incentivize our employees on referring people for roles that they think they'd be great at and being monetarily rewarded if that person ultimately takes the job. So you'd be amazed at how many people on my team and others have been referrals of someone outside in a different division at IAC or at a portfolio company. We found great success in doing that. LinkedIn posts, as well as making sure we're also looking at the very top of the funnel and building a pipeline for future IC prospects. So we go to career fairs, we participate at schools where there's top talent. And we're of course, like every other firm, fighting for that top talent and getting our name out there. But for example, we have two summer interns that we're currently interviewing for the M and A team right now. And we hope to develop and cultivate that talent such that when a spot opens on the team for full time, they'll come back.

What about hiring within? Internally?

Yes, we'd like to hire from within. We've done that over, really. The full history at IC is, you know, find someone who is ambitious and driven and smart and you throw them into a role and they either sink or swim. But you make a bet on someone with the hope that they can grow and evolve into the challenge that may be outside of what they've been doing, but you think they have the growth potential. To do a great job at that role. I can point to several examples where we've done that, where people have been given a shot to be a CFO of a company when they've never been a cfo. They've only had investing experience or take the top spot at a company. Having never run a company but have the building blocks of a lot of things that you need to run a company successfully. Judgment of people, leadership skills, organization, a keen understanding of growth and M and A and all of the above. But didn't have the role of CEO before that. And it's such a rare thing that really attracted me to the company that they stand by their word and have continued even as IC has become so successful in spinning out 10 public companies, soon to be 11 with Simio, that they've stayed true to we build future leaders within the company. And when the opportunity presents itself, they have demonstrated over and over again that they'll give people a shot. I think that's rare. A lot of these companies, or at least in my former life in private equity, you'd hire someone who has a track record of 25 years of running a business. And we've done the opposite. Young ambitious people are at the helm of most of ISEE's companies. And I think that's another reason we are able to attract great talent is people see that IC does what it says in terms of giving people a shot and internal mobility and that's why people have stayed around the IC network for so long is because we continuously promote from within and let people wear multiple hats because we'd rather have someone who has been in and around ISD stay within the organization. So it's also a great way to retain employees is giving them a new role to go and crush it.

What advice would you give to that person that's in a role, but that's super motivated, high performing, high potential and they want a shot at the cfo, the CEO getting on the M and a team following your footsteps. What advice would you give to them? How do you get that actual opportunity to give it a shot?

Depends on where you're trying to go. But I'll use the example that I know, which is what a lot of folks on my team say is I want to end up at an or I want to be an operator. I want to end up going to one of these companies and be in a leadership role. And the advice I give and my seniors give at the very top of our organization is get to know those companies and the people who are leading Those companies, as best you can reach out, you have to be proactive of your own career. Asking permission to reach out really never did anyone good. If you have genuine interest in a business and a role, the first thing and best thing you can do is get to know the people who are in those roles today and try to deliver value to them. People are generally receptive of others who are trying to help them in their mission. A good example is within the M and A team. We think about, as I said, a funnel into our portfolio companies. And it's not the only funnel, it's not the only exit plan for being an M and A. But a lot of the folks that sit on my team have the aspirations of being operators. We say, well, get involved in those companies, find where your skill set is valuable and by osmosis you'll learn about their company, their strategy, and be able to grow beyond the skill set you currently have just by being around the table. What I've noticed in my own career is if you use your skill set, provide value to people in different division of what you're doing with a common goal, you will learn their skill set and they will benefit from yours. And that collaboration creates great things, synergies, however you want to describe it. You learn from them, they learn from you, and then the next time they think, roll open. A lot of people call this luck, but it's never luck. There's a couple of people, they'll remember that you added a ton of value in that project and oh, they had more of a skill set here. But I bet they could learn because they learned a lot just by working side by side with me.

Proactively network with the give forward mindset.

Yeah, the wrong approach is to say, I really want to do this, so should I find a mentor to help me get there and then wait for next steps from what they think or wait for the spot to open because by the time the spot is open, the people who are ready to step into that role have already proactively gone in front of the decision makers to be very straightforward about it and shown that they can add value and be great at that. If you wait for the spot to be open, often it's been filled by someone who's already laid the groundwork to win it.

That's true. You got to be proactive on it. You just can't wait around.

I think that's my overall message, is proactiveness. Another piece of advice would be to really understand what you know and what you do well and what you're excited about you really distill down why you want to make a shift in your career or move into a different division or a different role or position. Try to find the linkages between what you're doing now and what you want to be doing and why your current skill set can translate or add value to what you ultimately want to do. I think that's a very important gap to bridge because wanting and doing are very different things. I also think there are a lot of roles that people think they'd be great at, and I've had this firsthand experience myself. But then when you start thinking about what those roles entail and what you enjoy doing in your current position, you realize actually it's not a great fit, that it sounds good, but the linkages are actually not there and what you enjoy doing has nothing to do with a job that you think is a right fit for you.

That ties back to why you should even network to get a better understanding of what that role actually entails.

Absolutely. If you speak to the people doing the role today, they will tell you what they spend all day and their weekend thinking about and you can assess if you would also want to be spending all your time thinking about those things. If the answer is no, you've saved yourself some time with COVID letters references.

Very true. How has Covid affected culture and what's the transition been like?

So I must say I started this role in a Covid world when I joined the team just over a year ago. I started virtually. It was now that we've lapped it for a year, I think most people can say it was very seamless. Amazing. There's been lots of discussion of just how much work and productivity can be done virtually. I was amazed at how seamless and how well the teamwork and collaboration unfolded virtually. That said, I think that we are now at a place where we can hopefully all see a line of sight and having a back to office environment where people feel comfortable coming to the office and meeting in person. I've been back at the office for about a month and I think that it's proven to me or shown me, I didn't forget during that one year that it's hard to replicate a lot of things in a remote setting. And so I'm a big believer that collaborating and the mentorship and apprenticeship that you get in person does make a difference and I see value in having shared spaces. So it's impacted it. Every business is going to have to contemplate what post Covid in the office means and Everyone has to make that decision for themselves about their view on what post Covid work looks like. From my own experience, I think you can get lots done virtually, but it doesn't replace some in person collaboration.

It sounds like you're a proponent of a hybrid model.

I think hybrid's great. You give people some flexibility in their work schedule. In this post Covid world where everyone has learned what they're able to accomplish at home while maintaining that sense of what you can build with culture and career growth with in person environment, how's.

Your M and A approach different from when you're working with portfolio companies versus looking at opportunities for new verticals?

So I guess I'll start with the portfolio company. It's top of mind since we've just we're close to announcing on a deal for one of my portfolio companies and have closed another deal since I started for portfoliocompanycare.com when we look at portfolio companies, our goal is really to be strategy first. So we look at what the company is trying to achieve over a near term as well as longer term horizon and then look for ways that M and A can either accelerate that plan or help them reach those goals. M and A is extremely close with our operating company management team. So with the CFO and corp dev team, we're always guided by the operating team strategy first. We look at it through the lens of does this acquisition get us to the goal faster, better, more efficiently and if those things hold true, it really comes down to justifying valuation and investment. Of course, M and A team drives and helps to determine whether that view holds true, that valuation is justified and we want to make the size of the bet. But it's really never without the full buy in of the management team. On faster, better, more efficient, that's the requisite. And then secondly on portfolio company, I guess this applies really on both sides. If it's a competitive process, we do need to do the work of why we would win versus others. I think there's this notion of if you're strategic, you always have a lower cost of capital and you should always be able to pay more. And that's certainly not the truth in this current state of M and A we live in. So it's part of the M and A team's role to think through deal strategy and execution why we win the race.

So you're essentially mapping these deals to the strategy which seems to be pretty mature and defined for these portfolio companies in terms of are they filling in white space, are they looking for market.

Expansion, I can give an example on that to kind of bring it to life because it varies across the companies. Of course, some are much more defined. Their organic growth plan is very much tied to a product roadmap. We're trying to get deeper into on demand services, for example, with care and we're building a product to turn a subscription service into on demand. And M and A is definitely looked at in that lens as can we acquire business that accelerates that product roadmap or is already there? Buy versus build. Market expansion you mentioned is something we think about. Supply is something we think about in a marketplace. At Angie Home Services we have a network of 250,000 service professionals. We're supply constrained. The consumer demand for these services outstrips the supply we have in the network. So do we think about how to accelerate supply with the acquisition? Absolutely. That can look different. As of course we're not acquiring for stagnant supply. We'd like to acquire a company that will meaningfully accelerate our ability to manufacture more supply. A perfect example of this would be in a sector where it's current. Let me give an example. And Angie would be look through our top 10 categories and we know we want to go deeper into the transaction. So one of our initiatives is pre price services. So rather than going through a consumer flow and then being matched with free service providers, one of our large product initiatives at Angie Home Services, to be the company for everything home, is to have pre priced services where the consumer can simply click on cleaning service or click on a appliance repair and we do the rest. At Angie we find the pro who fulfills the job. We deal with customer service and that's all negotiated up front as a pre priced service. This is a huge initiative for us at Angie. It lives with our other offering, but a huge lever of growth. MA comes into play to think through. Are there categories of folks where we can identify a company that's done this and owns a market for one of 200 categories that we service? At Angie we think about that in terms of scaling market expansion. But this would be very much category expansion for us.

That's a great example. What's the approach to new verticals?

It's different certainly. I think on a new vertical it's much more top down. We like to look at industries where we think the end state is obvious. So touched on this. But to go back to it, are there traditional industries where things are clearly broken, antiquated, inefficient? Are those big industries that we want to take a long Term view on several of our businesses are consumer marketplaces. So we would say we have an ability to see industries that are on that cusp of an online to offline to online transition. And what can we do with our expertise in consumer marketing to accelerate that adoption of offline to online? And we look for businesses where scale improves the product as opposed to the price. Putting all these things together top down makes a lot of sense because number one, you need to find the industry that we're excited about where all these things seem to make sense big enough TAM with clearly inefficiencies that we can innovate and disrupt where there are sustainable modes that we can create, whether that be network effects more and this is the point on scale improving the product as opposed to just the price. So the more users that enter a marketplace, the more buyers, the more sellers, the better the ultimate product becomes for the consumer, the better the product becomes for the supply. We like to see those flywheels, that flywheel working and at the heart of it, we're looking at consumer experiences and looking to improve with tech or with new thinking or potentially a new business model that we're excited about making a bet on something that we're forever owners and businesses, which is a unique piece of ic. So would we be excited of what the end state looks like 20 years if we execute X, Y and Z, what does the business look like in 10 years? And does that get us excited to give you at the high level? I've spoken to the operational expertise IC has in building scaling digital businesses. But we take all of that and try to not lead with what can we do to a business ultimately because that's an optimization play we like to look at. What are the secular trends that are happening in the industry? Who are the incumbent players? I sound very much like a VC investor right now, but that does guide our thinking at the very top. Before we get into what does the opportunity look like and how would we run our playbook? Because I think if the previous things are not true, we're using our limited time and resources to run at an industry where it just doesn't make sense for us to devote time and resources.

The way you described it is a little more VC thinking as opposed to PE thinking where we want to buy the business, fix it and sell it again. The things you mentioned, Eileen, are one, looking for highly inefficient industries. We talked about the scale, that scale that adds value, it creates moats. The example uses that network effect where you get more users and that allows you to make your offering more compelling and makes it more difficult to compete with. And then the other piece was around innovation that you're essentially looking for patterns. You're looking for these big trends that are emerging before they're widely known and accepted.

I was very vague when I said the end state seems obvious or we're not fortune tellers, but many of the industries that we look at are providing products and services that consumers and people have been using for centuries. So what are the signals or inflection points in the market that you can see that the current state, the status quo, doesn't make sense for where the world is today? I think we saw that in dating with Match. I think we clearly saw that in Nixpedia in travel, that it didn't make sense to have an offline agent navigating that process for the consumer. It didn't make sense for people to be limited to dating people just within a small radius around them. We're seeing it right now and I think it's essential to our thesis at care.com, finding child care and senior care and all types of care for those, the loved ones around you, a very high friction process that's difficult to navigate, that's emotional and technology and online can help navigate that experience and make it a more robust offering such that you as a consumer can find child care. In a world where we spend most of our time on our phone and shop for products and services online, I think you're seeing that in virtually every industry. We certainly think that's a long term secular trend that will continue. But we also note that we're not the only ones seeing that. So we look to the industries that haven't been overly cultivated and we can come in with a fresh perspective and run our playbook.

Yeah, it's fun to think about these. Even as building a business, you can encounter a lot of them. We just went through our SOC 2 audit, which is a highly inefficient process and one that seems to be at the early stages of having new technologies really transform it.

Yeah, I can point to a couple where the status quo processes have been entrenched in consumer thinking for so long that they're like the obvious ones that people have spent less time on. People always say to me that was so obvious, that should have happened. But of course, at the time when the industry was where it wasn't obvious to people because perceptions are sticky, things have always been a certain way. It really takes someone to rethink and question the status quo. And of Course a lot of capital and strong leaders and great execution to build those businesses. I could name 10 industries I think need disruption. But are there the 10 leaders who are going to build great sustainable cash flow positive businesses successfully out of those inefficiencies? Unclear. Finding both and marrying the right team, the opportunity, belief in that execution, that's when a bit of luck around the way that all those things work. We've certainly gotten lucky in the history of IC with all those things coming true under the right backdrop. But of course without making a bet, you can't get lucky. So you need to develop a thesis, pick a horse and do your best to anticipate the possible pitfalls. Think faster than your competitors. I don't think there's any low hanging fruit in tech right now. There's a lot of capital running at all the market that is ripe for opportunity right now and offline to online. So given not a lot of low hanging fruit, it's incumbent on investors to really not only think about the opportunity and just bet on tam, but find the asset and the entry point that that yields the best returns for their shareholders.

Yeah. Get all the pieces working the right way to get that perfect storm for success.

Absolutely. And you can't do any of those things without taking a certain level of risk. We say bet a lot in our industry, but of course it's always qualified risk with outcomes that we like to say you understand your baseline outcomes, but we want a path to have exponential growth or an unlock opportunity that everything can go. This will be a great investment in a big industry and a team we believe in. And if everything goes well and you get lucky, this could be a 10x. We like to find those unlock opportunities, bet on the team that we believe in. Not banking on that unlock happening, but certainly fueling that with our capital, our expertise. And if everything goes right, you still have that chance to really see the full vision take place. Place that's really exciting to us.

Yeah. So there's a lot of opportunities to create value.

Yes. Especially at a certain scale. I think we're trying to put 3 billion to work right now. We have to think about capital allocation and what's the best return on our capital and return on our management time. We are set up to build companies. Certainly that's what we've done over our 25 year history thinking ahead growing businesses. But you can't do that across a portfolio of 50 and we recognize that. And so return on capital and return on time are both important considerations for us.

One of the things that always intrigues me is the governance around doing deals. Can you walk me through what does the decision making process look like?

I'll keep it at a high level. I describe it as collaborative and team oriented throughout the entire process. We have a weekly meeting with our C suite. We manage our deal process as anyone would with a funnel of opportunities at the very top. And that gets whittled down over time with the best opportunities that our execs are most excited about at the end of the funnel. I think that our weekly is meant to cover everything within that funnel. So making sure that at the very top of the funnel, we're looking at the right sectors that there's interest in pursuing further as things progress and opportunities become more harvested. Making sure, reviewing in detail due diligence and what are the key questions we need to understand for us to get super excited such that we would be interested in bidding on a company and then all the way through execution. Making sure that at the very top of our organization we understand what we're buying, which ultimately is the most important. But without having the previous steps, all of that context, you miss it. In the best processes, things start at the very top where they're still in ideation discovery mode. We look at, to use my example earlier, of a new vertical. You look across an industry that we think is really exciting. We identify all the companies that are chasing that opportunity. We make an assessment along with our management team on who we think is best positioned to win that industry. Then of course is the actual deal making process. Is there a deal to be done at what price and does it make sense for us? Do we want to take that bet? Our CEO, cfo, CSO are all involved in that process along the way. And if it's a portfolio company acquisition, that management team. So it is very much a collaborative. I know that's a high level way of describing it, but it has to be collaborative in that you have several actors at play here. You have an M and A team, you have a potential portfolio company and ultimately our execs need to be able to stand in front of our shareholders and say, we support this acquisition. This is the future of ISE growth and we're putting your capital at work in this new investment.

This is interesting. You got a lot of stakeholders involved. It needs a collaborative view because there's a lot to weigh in on. The strategy you're executing, who's got the most influence between the CEO, board, yourself and so forth.

We have to think like owners. So every stakeholder who's in the decision making room down from someone in M and A myself portfolio company at the very top of our organization. We all have to think like owners and like you're writing a check from your own pocketbook. And that's the level of conviction that I think you need in order to stand in front of our CEO, cfo, CSO and say I recommend this deal. That being said, I think it's very clear that my position is to surface opportunities and put them in front of people, do the work, make sure that all along the way our team, our M and A team, is working alongside the portfolio company. To my whole point of we would never do a deal without their 100% buy in. Then it's managing that alongside the execs at IC and making sure we're all cohesive and agreed upon what the thesis is and what we're willing to pay and the size of check we're willing to write for a deal. There's no clear cut, there's a decision maker. This is the process. I rather just think about it as my team is responsible for sourcing, diligencing and executing opportunities and we bring people along the way that are the decision makers and then it's a collaborative decision on we should do this or we should not. Top down, not bottom up. It's truly collaborative.

No matter where the deal comes from, you still need to take that owner mindset and considerations across the team.

Absolutely. And we're all equity holders and I see that's a huge portion of our compensation is your stockholder. It's something that I think is so important is to have a stake in what you're doing and we emphasize it a lot on our team is would you write a check? It goes all the way to the top of if you have conviction for an idea and it's a good idea, would you write a check from your own bank account and why and what size of that check of your personal wealth would you be willing to put on it? I think people have different risk appetites but if you don't have that level of conviction, you can't stand in front of our board and say I recommend this deal if you wouldn't recommend it for yourself.

Fair point. How do you measure success on your deals?

We are a public company so of course an important measure is the value we deliver to our shareholders. I don't think about that on a day to day basis. I think that would be very myopic way of looking at success. It's just our share price. I think we see definitely Take a longer term view. We set long term goals for our businesses like any other investor, but then we recognize that it's not necessarily a linear path to get there. Short term pain for long term gain. I believe in that. If the ultimate long term view is the right one. I think we're really open and honest at the street about our plans to do this when we're in build and invest mode for our companies. So Angie is a good example of this. We're undergoing a business transformation right now with the change from a lead connecting marketplace model to a true consumer fixed price product that we're delivering. When you're in build mode, you need to invest and sometimes you're sacrificing short term profitability and that's okay to distill down more simply, we're not a private equity firm so we don't look at a five year exit. We're forever holders. That's the lens that we look at things. So 10 years out, is it a sustainable growing business with strong margin profile that make us think it'll be around for the next 10 years? That's probably success when we're thinking about on a deal by deal basis.

Is there a challenge with being a public company having these strategies that are built around a long view, but then as a public company you're essentially measured on a quarterly basis.

There's a rub though. I do think the public investor community that gets IC gets us and what it is that we do because we've demonstrated such a strong track record of running our playbook that they get it. We deliver strong results to our shareholders. We have for 15 years if you look at our performance. But that growth has come in different ways from different businesses and different points of their maturity. Vimeo is a great example. We're going to deliver a ton of shareholder value from a business that we really acquired by accident over 15 years ago and harvested and grew it and transformed it into now a multibillion dollar business. If you look five years ago, maybe you wouldn't be clear on this outcome and what a great investor return it has been. But our investors have given us or given our performance, give us the flexibility and the benefit of the doubt that we are smart stewards of capital and can take a long term view in building businesses our core expertise.

Stay true to your vision.

We haven't strayed from it. I've only been here a year, but I think that legacy really imbues everything that we do. We look at what's happened in the past, rethink it and it does form our view going forward. So we don't have to think history is going to repeat itself 100 times over. Of course it won't, but using past experience to color our view on what might happen in other industries has certainly been a great pattern. And you can point to many similarities between what we accomplished in Expedia, Ticketmaster, et cetera. To know that consumer marketplaces is the theme that I see that to distill that down as our only strategy would be probably too simplistic.

Can I ask you some questions for fun?

Sure.

We have this M and A science academy and we're launching a diversity scholarship at our next event in June. And I thought it'd be fun just to get some little highlight perspectives that are just more fun career questions. And it might fit in with this interview too.

Sure.

Our goal is just to introduce M and A as a career path to more diverse background, more women, more different folks. And a lot of people talk about it, but there's no real actions. We're like, why don't we just give access to the training for free and see if you can really enable a better talent pool that way. One question is how did you get into M and A? What drew you in and got you interested in this field?

Okay, I'm going to try to answer it as honestly as I possibly can. I had an undergraduate business degree, so I studied business at Michigan. It's a three year program, it's now a four year program. I think exactly the same coursework that you would have as a bba, as an mba. So you learn accounting, finance, marketing, then you need to find a job after you graduate. So I stumbled upon MA really through investment banking. And I was attracted to investment banking because of the fast paced deal culture that I believed it to be based on description didn't know what I was doing. I'm much less at the time, this is 10 years ago, much less probably because lack of Internet at the time. So I was less read about exactly what it is to be an investment banking analyst, except that I knew that it was fast paced, highly intellectually stimulating other ambitious people who hoped that it would be a platform to do something else or you can stay as a lifelong banker. That was less attractive to me. When I was in investment banking I was in a sector focused group which was consumer retail. I wanted to learn everything about doing deals within that sector. That fascinated me. Becoming an expert in consumer deal making and that ecosystem just always they say follow your passion. What naturally comes to you that you naturally think is interesting. It was always consumer for me. MA was a piece of the strategy of most of these companies that I just thought was faster. Maybe I'm just a speed freak. I'm really not. But a faster way to develop visions and strategies. You see these businesses with these five year plans and developing all these goals organically. And then some companies are masters of M and A. They just see the future and they can get there that much faster and accelerate their growth by acquiring other businesses. So I think that speed and that excitement and really attracted me. It was all grounded in. This is an industry I really like. I like to read about it outside of my day job. I like to follow what was happening on DealBook. For anyone who is thinking about a career in M and A and where they want to go, sure, be pragmatic and think of where the industry is going. But go on DealBook and focus on the deals that you like. Reading about what naturally is interesting to you and follow that intuition. Because I think so often we are told to not follow your your intuition. Do what makes more sense. What's most practical or where all the dollars are heading right now. What's best for your future career sometime leads you astray. You should just stick with what you think is fundamentally interesting to you.

What do you love about being an M and A?

It is a fascinating place to be. You can learn so much by looking at a deal that would take you years as an operator to learn. Maybe my operator colleagues will disagree but I think you just get a crash course in industry by looking at a deal. Because immediately you have to understand all the dynamics at play for a company where they fit within the competitive landscape, what their strategy is. And you can read that through their financial statements. It's such a good way to distill down the value of a business. So you're looking at how should I value this business? You need to know everything to value a business. You need to understand their strategy. I'm being repetitive at this point point. But that's what I love about it. It's a crash course and you have to come to a decision at the end of it. So I like the finality of it. The deal process to me offers a lot in that there's a time horizon. Generally that it is through that process you learn so much just by sheer can't get to the answer without knowing everything that comes before it. And I can't say that I've worked in so many industries outside of M and A since most of what I've done has But I've spoken to enough people who have done different product functions where I think it's hard to get to that speed of learning in tons of career paths.

What do you dislike about being an M and A?

That's a good question. Probably the same thing. Very demanding. It happens on a timeline that you can often not control. It's highly competitive. It attracts people who tend to like the same things about it, so that it's fast paced and I have to move at a quick clip. It requires a lot of dedication and rigor in terms of not just getting to the place where you can evaluate a deal, but all the work that goes into becoming an M and A professional. There's a lot. There's not a state where you get to an M and A where you can just cruise because it's always the next challenge and the next deal. And maybe that's what's so attractive about it to me is you're always learning. But with that comes, as you can imagine, it's just high pressure advice you'd.

Give to those interested in pursuing a.

Career in M and A look inside of number one, why? What drives you? I think it used to be when I was in college, you're really analytical or you. I feel like analytical skills was like the number one thing that they would say is needed to have a job in M and A. I think that's just baseline. Like being analytical is great, but there's so many things that you have to look inside to see if you'd like this career fundamentally, because there's many things you could do with an analytical skill set. So advice, I guess talk to people who are in the field, what their 9 to 5 or who has a 9 to 5, what their workday looks like, what the steps were to get to, what they're doing now. And if it sounds like a challenge that you want to do, then read all. You can, spend all of your time reading about what's happening in the market. The great thing about M and A is there's a whole public landscape of business news. And now it's even more pervasive. You have young people, in fact, kids, really kids reading about investing in podcasts and in business news articles as young as eight, which is wonderful. Maybe the tools were always there and I just didn't see them. But I think it's great the amount of democratization that's happened in investing and you should use those tool sets to get you up to speed.

Last question. What's the craziest thing you've Seen in M and A.

The craziest thing is really what's happening right now with the speed of investment capital being deployed by some of the top tier VCs. There's been a lot spoken about just the pace and investment strategy in and of itself is just speed. I think it speaks to how competitive the landscape is currently, how much conviction there is in a lot of these industries that are being disrupted by tech. And that you can really differentiate yourself by being faster and more decisive. Which was not always the case. It was who is the best at identifying an opportunity but then doing the work and the fundamental work to get to a deal. And that was a process and there were rules to play by. And there are firms who are just bucking the trend by saying no, we'll make a bet much faster. We'll get to a decision such that the company wants to work with us because we were that much more decisive. And you're seeing this unfold at a grand scale which has real implications for strategics, for other sources of growth capital, for private equity. And I think this no rules world will continue. People will find other rules that don't apply and try to exploit them and get a competitive edge in that way. I love thinking about what your edge is. Right. I worked in private equity. Often when funds raise capital you have to talk to what your edge is in winning a deal. I think about it all the time now, probably at a grander scale is where strategic but also a holding company. And we're competing against many different capital allocators. And so edge is so important. And I think the way to get edge is not just clear cut anymore. It used to be long standing reputation and brand and total dollars. There's so many ways to find edge in this new normal that I think you're going to see a lot of companies finding new ways to find their competitive differentiators.

Today's market is the hot crazy thing that demands speed and you got to have an edge to win.

You do. I wish I had a 10 year, I could jump forward in time and see what M and a looks like 10 years from now. Technology and systems will certainly have a key role in playing how people find edge. You've seen that in the public markets, of course, years ago. You have seen it less than private markets. But I suspect that a similar story will unfold in private markets. It's happening already, but not at the scale that it has in public markets.

So interesting. Eileen, thank you so much for your time today. I enjoyed this conversation.

I did too. Thanks for having me.

My pleasure. Here's to the deal. Thank you for taking the time to explore the world of M and A with our podcast. Please subscribe for more content and conversations with industry leaders. If you like our podcast, please support us by leaving a five star review and sharing it. I enjoy hearing feedback and connecting with our listeners. You can reach me by my email. It's Kison K I s o n dealroom.net M&A Science is sponsored by Dealroom, a project management solution for mergers and acquisitions. Additional educational content is available on Deal Room's blog@dealroom.net blog. Thank you again for listening to M and A Science. See you next time. Views and opinions expressed on M and A Science reflect only those individuals and do not reflect the views of any company or entity mentioned or affiliated with any individual. This podcast is purely educational and is not intended to serve as a basis for any investment or financial decisions.