How to Scale Your Corporate Development Function

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Great.

So the one thing that really caught my interest and why we prompted you to do this interview was your background. It wasn't the super traditional M and A background. You went to IIT got your bachelor's in chemical engineering. That wasn't enough. You got your Master's in chemical engineering at MIT and then followed that up with a PhD in chemical engineering at MIT. And today you're running corporate development at GoPuff. So I thought that was unique and I'd love to just kick things off with a little more about your background.

It's not like I was in grade three and I thought I would be a corporate professional. That's not how it works. It was over a period of time that you take certain decisions in your life and you like certain things and you end up where you end up. Wrapping up undergrad I always wanted to be an executive in the chemical industry. That's what My background was I thought it may make sense to get an advanced degree because need to know a lot of technicalities and then maybe do consulting after that. So that was a path. MIT was a great setting, really loved it. Did all my chemical engineering classes but business school classes at the same time so I can get better with finance and things like that. And then started doing consulting. So I was ad carney for about five, six years. Things were going well, was really enjoying what I was doing. I wasn't really looking to leave but all of a sudden an opportunity with Uber showed up. One of my very close friends back from MIT was working at Uber. He said it's a great place. It's still early days, an amazing place to join if you're interested. I talked to my then boss who said what do you know about M and A? And look as a consultant you do due diligence and you do integration work but you don't really do hardcore deal execution. So I didn't really know much. But he used to hire for potential and more about intellectual strength more than anything else. So we interviewed. He really liked me that rest is history. So now I've been corp dev, been carp dev for about seven, eight years now and I love it. I found my destiny over a period of time. That's how it works.

It's really interesting. You basically hired because you're smart.

That's a good principle for most part. If you think somebody's really good and they are good cultural fit rest of the stuff can be figured out. Most of the stuff we do is not rocket science. It can be learned pretty easily over a couple years and if you have the right temperament I would hire but I always have potential than the current skill set.

We can both agree on that from the start. In regards to your current M and A role, does your background help you be a better M and A practitioner?

I think it absolutely does. So look different M and A groups and different M and A functions will operate fairly differently. I have been mostly in consumer tech and if you think about consumer tech, when you're doing M and A for these growth stage companies there's a lot of unknowns. So you solving many complex problems not knowing what that future entails. It's not the traditional banker model that I'll build NPV for successive years and we know exactly what it's going to be and it may vary by a couple of percentage points. We're doing a lot of game theory here. When I was at Uber and we were looking at should we divest China should we acquire Middle East. And these were several billion dollar transactions. You have to think from a game theory perspective and figure out what are the possible outcomes. So something that you learn in PhD is with very limited information, how can you solve pretty complex problems. The same thing applies here with that you make information with very limited information the best of the abilities that you can put to it and analyze and pick what makes work. So I think some of the same problem solving principles apply now. It's not all the specifics that you learn, but a lot of problem solving skills that you learned.

All right. Some different approaches or thinking around problem solving for sure. The last role you had, they didn't have a corporate development function at all. So it seems like part of this, your journey is working in a still an emerging corporate development function. But then even being involved at the early part of standing it up.

When I was at Oyo, there wasn't really much of a corporate function. I joined and we built a team of seven or eight over a period of I would say two or three months. And it's hard to scale a function brand new because when you're starting it up, you're getting ramped yourself while you build out that function. We talked about this, hired people based on the potential. So started hiring a couple of people quickly. Actually I hired my first person on the team without actually joining the company. It was through my past network. I knew somebody was really good. I thought they would be great. Fit just happened that they were starting to look for a job. So I said why don't we get ramped together? So I made my first hire that way and then slowly again built based on people who I thought were strong. The main thing about core dev in an early stage company is you'll get to see a lot of different work. Typically corp dev in a growth stage company will do fundraising, they will do M and A, they will do business deals that may require help, they will do corporate strategy. So you need somebody who can plug in what the need is. It's not necessarily just doing the M and A execution piece. It's everything from end to end. And hence you want to hire people who are really good and can take different roles as per need basis. That was again the philosophy of hiring a team who can actually step into that. The second thing is you want people who have complementary skill sets. If you hire people who have very similar skill sets, it's going to be a problem. So somebody's really good at strategy but not so much in number crunching. That's going to be a problem. So you want to hire people who have complimentary skillset and can overall elevate the quality of the team.

Some key things I'm hearing, it's almost some of the things I look for, right, Capability to figure out the next steps, thinking about problem solving, being able to execute independently. I notice in this industry it seems to be an emphasis on the technical skills versus the people skills and two very different things. Especially when you're executing on these plans. Is there a certain thing where you'd look at all right, this person's got a lot of that more on the technical side and he can develop the people side or vice versa. Is there one that you would seek out versus the other?

Technical skills are still very important. What I try to look for is if that person is in a more junior role, like associate manager role, it's okay not to have some of those technical skills and they'll have some of it. If they were previous banker, consultant, they'll have some of it. But I'm here to help and I can coach them on that. So I think that part is there. If I believe I'm going to hire for a director, senior director role, I tend to be a little bit more biased there having those skills. Again, it depends on the bandwidth I'm going to have to support. But I can't support everything, it's going to take too much bandwidth. So I think that's how I think about skills. Like they're more needed for slightly more senior role. The other thing is some of those skill sets that I talked about are generic but some of them are very specific, right Negotiation skills. Some people have those innate and some people don't. And one can coach as much as possible, but it takes a long time to acquire some of those skills. So then you have to decide am I going to put these people in a front facing role or they're more in more analysis and strategy roles. That is also an important distinguishment that you need to have. I do believe that a lot of those things are possible. Just takes a little bit more time.

That's a good way to look at it. It's really getting the right fit overall.

And look, when I started business was 2015, I didn't really know what reps and warranties were. I had no idea. And you have to be curious, right? As long as you ask those questions, you will get there. It's not that complicated. You can get there with time. You need a good manager who can help you with a lot of that.

When we look at building a function, we went right to hiring. Like here's step one. Really start thinking through the hiring. I'm sure there's part of like strategy ahead of time, but. But in terms of building the function, you're. You gotta build a team.

Yeah.

Who are those first hires?

In my past roles I would have said that I wait before I hire. I really need to understand the needs. But sometimes you need those one or two to get started. So those one or two to get started. I went to somebody I'd worked with in the couple past lives and they were very strong. And when they were strong, I remember there was a project I worked with this individual back at Dow Chemicals and we were looking at a growth strategy project project for them. And this individual was a couple years or three years out of school, had no idea about chemical engineering whatsoever. These were pretty complex topics and I knew they could get ramped so quickly on such a complex topic pretty quickly. I knew that if I pulled them in. And since then he went and did like business school. MBA at hbs, had more pedigree, had worked at a couple of the startups that I thought that they would have like a pretty strong skill set to come and work at oyo. So I made that hiring decision well up front. It was a no brainer in my mind. And he thrived in that environment. Even not doing corp dev before, he was really a top performer. I think one or two of those typically you worked with before you take that leap of faith. Now that does create a bias and I want to be sure that I don't hire only people I work with because then you tend to hire people with very similar backgrounds. So other than that one person, everybody I hired after that was not somebody I knew directly. They were from fairly difficult backgrounds. One was private equity, one was more like operations consulting, one was banking. So they were pretty different skill sets after that. But yeah, the first one or two hires, you often tend to hire who you are comfortable with and don't want to take that risk.

The risk part's interesting. You're selling me on this. It's a profile to consider where you have somebody with this engineering background. They learn a lot of those soft skills and those things, but there's just unique capabilities bring to the table. I was going to ask you about how your hiring maps to the strategy, but you're answering it already.

So the first one is from a strategy perspective. When I was at Oyo, we were doing two kinds of deals. One was standard M and A and the Second was a roll up play we were doing in a vacation rental home business that was primarily in Europe, but we were trying to scale that in the US as well. And so those were two very different skill sets. So one is pure M and A. So requires a lot of intellectual horsepower, a lot of thinking through pros and cons. We talked about it. The other one was a roll up play, which was more like somewhere between sales and M and A. You're quiring small assets from a couple hundred thousand dollars, 10 to 15 million inside. So that's more like a private equity. Got to make a lot of cold calls, get the potential companies you could roll up, do quick diligence, get an answer and keep doing that. That's a skill set. You need somebody who's willing to pick up the phone, call people and actually then go ahead with the transaction. It's a fairly different skillset. You hire like a top profile M and A guy. They may not actually like that job. So you've got to really think about what you're trying for and what's the right skill set.

I like that. Defining the skillset against that strategy and then hiring for that.

I tend to typically hire people for capability for another reason. If you're hiring really high potential people, they want progression in life, they want to learn. If you hire somebody who's done that already for five years in their life and you give them the same role, after a year they're like, I'm bored. What should I do? I've done this. Now I think somebody who's not done that is more hungry, they want to learn more, they see more progression ahead of them and they keep doing a much better job at it because they just want to learn. That keeps them excited. When somebody joins, especially at junior ranks, the idea is to take them through the journey. When you start, you're going to do more strategy and analysis. Okay, you've done that. Now can you actually take that and present that to internal leadership? Can you actually then present that to the CEO? Okay, now you've done that. Let me put you into a call with the other side of negotiations. I'm going to start in a safe environment. You should just sit and listen. But then, okay, now you've sat and listened. Now is the time for you to actually learn a little bit more. And the only way to do that is to do it. So why don't you negotiate with me a small agreement like a TSA, which is not going to be as critical as compared to the main doc. So like, why don't we do that together? And then once you do that, you're like, okay, now I can have you negotiate a more bigger document. I'm going to start safe again, start with a smaller deal. That's going to be less of a risk as compared to a mega deal. You have to give them a little bit of work so that they keep learning and improving till they can do your job, essentially. That should be the progression.

Truly high on capability. How do you find for sure that hunger is really there?

That's a tough one. How do you know for sure? Because when you typically interview, you're getting like a few hours of exposure with that person. So hiring is very important. But again, how do you do a good job? First thing is you need to screen the right set of people and you need to screen more people. For example, that gopal, when I started, I built a team. I needed to hire like a couple of directors. One on integration side, one on the deal side. It's tough for the recruiters to figure out what you're exactly looking for, especially when you have just started and they don't have that relationship with you. So we posted on LinkedIn and I think over a period of two months, we got, I don't know, four or five hundred resumes. Probably like half of them are completely not a right fit for the business because people just apply the other two to 300. I went through the entire 500 resumes. I was like, I cannot outsource the task of having. I just think you have to do that yourself. So I went through the full 200. Then I said, okay, I don't need to call all of them. The first call the recruiter can do to at least get a rough sense of idea. So maybe the recruiter called like 30, 40 odd people, out of which we said, okay, these 20 will make sense. We don't interview. So I did all the 21st screens myself, said, I cannot again outsource that. So I think that it starts from that perspective. After that, the main thing is, how do you make sure these are the right sort of people? First is their background. Have they actually shown progression in their life? Have they actually gone to good schools? And it's fine if you haven't gone to good schools. Have you actually worked in good places where you actually learned and progressed? If you see a pattern that they have progressed, they have been promoted, you at least see that pattern, right? So I think that's definitely there. So you need to have certain spike on the resume. That is important. Again, that's not enough. But I think that's at least important to see. At least you have some spike on the resume after you see that. I typically believe that a case study is pretty important in the hiring process. We do it two ways. One is even screen myself. I would do a small case study just how people can think on their feet. It's not a complicated problem like trying to think how they will solve an ambiguous problem. How would they think about it? And there are no right or wrong answer. But the thought process is important. And then if they have cleared the screens with the full team, we would give them full, pretty detailed case study. Again, that shows a few things. One is when they get enough time, it's unfair sometimes to give 15 minutes and expect great answers. But if you give four, five days, somebody should be able to think through then. Have they done enough homework? If they have hunger, they would have done homework, they would have done some research, they would have put their best foot forward. Because typically that's a place where you should put your best foot forward. This is an interview. You should be hungry for the job at least. And then you see what output they produce from that. Again, there are no right or wrong answers. And no, you won't have inside information if you're interviewing. But at least you gave it enough thought from that process. This is all the hard set of skills after that, the soft set of skills that will be done through some interviews. And that's why I try to have a fairly diverse interview panel. Somebody from my team, somebody from the partner functions like say finance or legal or otherwise. So we will think through some of those partner functions and having diverse skill sets to interview this person. And that's how you make a decision. It's still not going to be perfect, but that's what you do.

I like how it's mixed. There's an objective with the case studies. Then you do the culture fit with the in person or the people interviews. I like that you run a really comprehensive process. You have a really strong funnel there. You're not just here's my best out of three, you're getting a big pool of candidate and very much being diligent through that process. On those case studies when I hire I'm really looking at the follow up emails. Yeah, that's all I look. It just tells me so much how well you paid attention, what's your communication style. And then that's the only thing I remember taking 15, 20 calls a day. So you don't get that. It's a blur. I forget about it. But with yours you have the case studies. There's two of them. Can you give me a little bit about how big it sounds? Like that can give you that sense of if this person's really hungry, that they're going through this process and they're taking it serious, but they're really doing the work along the way.

Yeah, the case studies, we try to keep it in a way that it has some creative elements, some problem solving element and some numerical element. That's how we think about it because that's what the job entails.

They give you an example one, I.

Would just make this one up. So suppose we were gonna have quick commerce company. So I would say, and let's say we've done some international M and A in the past. A problem study could be like, hey, we're thinking of it and these are full hypothetical. Right. These are not actual problems we're solving for, but we want to get a most like a representative thing. So we'd be like, we're expanding internationally. How would you think about prioritizing international markets? What would be a valuation framework you would use what could be some interesting targets. Walk us through an example of what it looks like to value such a company. So that could be example if it's an integration, we could say, hey, we acquired Velmo in California. How would you think about the integration framework for that? What would be the key KPIs you would track things like that. So you would take a real world problem and give it. But again, not going to minutia, but at least from a strategy perspective, you look for like five to eight slides somebody can produce in terms of the output and then you have a discussion on that and then you push on some of the details like how would you think about this? So I think that live discussion after somebody has thought through such a problem is super interesting. And you get like a wide variety of outputs from that. It's interesting how people think about it.

I like that a lot where you have them answer to something very relatable to what they're actually going to do.

Yeah.

And not over commitment. It's a good fair for the consideration. This is a job that you're really pursuing and showing that seriousness. You probably weed a lot of people out right there too because you, like you said, you also get the varying response where you could tell like, all right, this person did a 20 minute brain dump, then call it a day.

Look, I'm not expecting that these people will spend like 40 hours on this. My expectation is folks spend five to 10 hours on this. Look, this is not in the foot, it's not a screening exercise. This is something that will help us get to the right person. I think it's important for both people for us to learn about how somebody thinks but also for that person to understand what kind of problems we'll be solving for. Personally, like I've interviewed in my life where I've gotten these problems and it's actually pretty interesting, at least personally I thought it was a great way for me to learn about the company. I'm just going to make this up. Let's say this company was an industry I had no idea about. Let's just say insurance or something. At this point I don't know anything about insurance. So that makes me read up on this stuff. I learn about a sector and again some people are more intellectually curious than others. For me it's learning something new is interesting. So I learn about an industry. I may read up on an S1 about a competitor. I may read an S1 about the company itself. It's a public company. I may read the annual reports for the company. It gives you a lot of interesting information. So I think it helps you decide, oh, is this something that I really find interesting or this is something I don't like? I have no interest in. You better do that before you do the job. So I think it's best for both sides to learn through the process.

You're getting a good example of what a deliverable would look like and then also how they present communicate around it.

Yeah, every job is different and this is for CopDev. It may or may not apply, but I do believe that industry is changing in the direction of case studies. More often than not we see people focus on case studies for cognitive especially. So we do see that quite a bit.

Would you differentiate between case study and building a business case?

It can be a part of it. Typically business case is a layer deeper and if you feel like that should be the case to be done for a specific skill set. For example, if you want to hire an analyst who's going to be building a lot of financial models, we may actually give an Excel exercise. So it may not be a presentation, it may be an Excel exercise sometimes with data that we may provide. I was talking to an individual who was going to join a company as a CFO of a very late stage company. This person had been CFO at a public company before and he actually got an exercise to build a three statement model as a cfo. He had to Build a three statement model. So if you think about that, there are people who really value these skillsets and want to hire the right set, especially the more senior the person is and this becomes important even. I remember when Dara interviewed for the Uber job, he had to do a case study.

What about when it's time to grow? How do you know when it's time to hire more people?

My philosophy of hiring is that you hire enough people that they're pushed, but they're not bored, but they're not pushed so hard that they feel like they are burnt out. So that's. It's a very tricky balance. And another thing which is different for Prop Dev is the workload is a little spiky, right? Because the day to day role can change a lot depending on the transaction that's going. So if you hire too many people, they're going to be bored in the low times. However, if you hire too few people, the max becomes too difficult. So it's pretty difficult to really get your staffing model. But I tend to staff a little bit leaner. So they are pushed, but they don't have to burn the bin lane all the time. And that means that when really the spike comes, you have to push back and say we can't do this. Or you ask a partner function for resource. It used to happen when we were Uber. There was a time right before ipo, the workload was insane, there was no sleeping. I remember was working on the Careem transaction right before the ipo. It was a few more months and there was another transaction overseas that I can't comment about. Also in a different time zone while we were working on the ipo. So it was pretty crazy. Then you would say, hey finance, can you lend us like a resource or two during this time period so we can actually do that? So you need to do that sometimes. But in the end try to hire lean, hire really good people and then just work through that. That's the philosophy.

I like how you're making these bets. You mentioned earlier on potential hires. How do you develop those hires? Do you have a formal mentorship program? How do you work with them?

It's learning on the job for most part. So you have to be more hands on to begin with to get started. The biggest mistake the managers make, which I'm sure I also make some time, is not giving the junior folks enough context. The context is super important that they can actually make the right decisions themselves. So give more context, more help up front, give more guidance, ask them to ask more Questions. Some of it was a little easier back in the pre Covid days when you were just sitting next to each other. Then you can turn around the chair and do it. It's a little harder in a remote environment. I think Slack does a good enough job for practical purposes, but still, how do junior folks feel comfortable that they can actually ask those questions? Especially somebody who's one or two levels down, not your direct report. How do you make sure trying to have more stand up meetings once or twice a week, give more context, and then supervise their deliverables more early on. It's super important. And then I think you can typically see there are certain skill sets they're pretty good at. So you can like back off and not be the person who's breathing on the neck and let them have their own freedom. But there's certain places where they need more help being more proactive about that. It's not easy. I think being a people manager you have to like really balance your time that you're not spending way too much of your time in the weeds because otherwise you'll not really be able to execute at your level. But also at the same time, if you don't do some of that and it leads to errors down the lane that should not have been there, then it backfires. That trust comes with time. Till you get that trust, it takes a little bit of handholding and closed working. And once you have the trust, it takes off. That's why hiring the right set of person is super, super important. Once you have a good team, it makes everybody's life easier. And if you have hired the wrong person, it's a problem because they struggle, you struggle. It is not fun for either of the sites. So it's a tough one.

Make sure you hire the right people and provide a good communication framework once you do.

Absolutely.

What about this thing called M and A integration? How do you think about that hiring for it? What does that look like?

From the professionals listening to this podcast, they'll realize integration is a pretty thankless job often, right? Because once the deal is done, the excitement's gone and there are people who are stuck with the integration work and they're like, oh, but we don't really have any resources to do this. Oh, we didn't really realize this intelligence. This needs to be done. Or by the way, the direction has changed so we have to do redo this. Completely different. And then you have gone down a certain path. Integration is hard. It's very hard. Most of the value of the deal is realized if you do the integration. So back in the day when we started at Uber, it was a small team, so the same person was responsible for the deal and then was responsible to go through and through the integration work as well. That got a lot of continuity and made sure that people were thinking it through all the way to the end. So that model worked well. That works well in smaller COP dev teams. But when COP dev teams are large and you're doing mega deals all the time, you need a dedicated integration function. So I think that part becomes very important. So first of all, I think integration has to be taught right at the time of the deal execution itself. It can't be an afterthought. And that's a mistake you will see being made time and again. We'll figure it out. Some of the things you will figure it out. But I think the high level core principles, the high level plan, the resourcing has to be figured out front. So you do that before you sign the deal because there is no walking away from the deal.

What is your definition of beginning execution? It sounds like it's before loi.

I think it's somewhere between LOI and definitive docs. At loi, you can have high level conversation on what it would make from a leader. So for example, you could go talk to the CTO and say, we're going to sign this loi. This is the implications we'll have. Are we okay doing this kind of a thing? A lot of the details will be fleshed out between loi.

Is there a broader thinking of go to market and something at least a strategy there before?

Yeah, I think a lot of the LOI is driven by the deal map and the strategic fit. Some of it is driven by integration. Some of the deals will be very complex, so you have to figure it out from an integration perspective. But what we used to do is we would have at least one dedicated point of contact for CopDev for each of the functions. So we would preview it with the dedicated contact, which could be a senior leader, maybe their chief of staff, or it could be like their strategy person. And we would at least make sure there's no big red flag. If there's a big red flag, you pause at the other. I state to itself. But you don't really figure out the resourcing plans. This can be figured out, but it's in the realm of something that can be figured out. After you sign loi, you bring these partner functions in any ways to do the diligence work and you're going to negotiate the docs, you have to figure out the agreement. So you need their help anyways. At that point you start building it up. You don't figure out who exactly will work on this, but okay, we need probably five engineers to do this. You figure that level of detail out between loi definitive docs. Now the question often is, have you figured out every detail? No, you're not going to figure out every detail, but you should figure out most of the necessary details.

Who's involved in doing that? Do you also have those folks doing diligence also planning on the integration?

Typically we try to keep it that way because first of all, as when you do M and A, you can only bring so many people. It's complicated. At loi stage, it's even fewer. Even in the definitive stage, you keep expanding the 10 slowly, right? And you always want to keep it smaller, especially if it's a sensitive deal. Some deals are definitely way more sensitive than others. At Divestiture is definitely way more sensitive than an acquisition. So you have to think through all the implications of that. Then you have to bring the right set of people, which is important. And typically you want continuity. If you have somebody from that function who does one deal and then you have somebody completely different, they don't have the learnings, they don't really have the experience to have done that. So we try to have single points of contact. It may not work every time, it may be different, but you want to have that continuity from that perspective. And the third thing is, do they have the right balance of business and that skill set? Because you may be a great engineer, but you need to have a little bit of business perspective to do that. Also, we may have to have you negotiate some of the things with the other side, especially when you're trying to figure out a DSA or like that can actually put you on a call and have that discussion as well. So you need the right set of people for those set of discussions. So I think you figured it out a little bit of time. Who are the right stakeholders for certain deals.

Is there a point that you would say we need to have a dedicated imo?

So it depends on the stage of the company. But yes, for deals that are large, like we acquired Kareem for $3 billion when I was at Uber, very large deal, thousands of people involved. You'll need a dedicated IMO for that. That is a full time job for many people at that point of time. But if you're doing a few small deals here or there, you may not need a dedicated imo, you may need an integration person, but you don't need every partner function to have dedicated parts people. There's certain functions that you may still need, like in hr, like you definitely need somebody to pay heavy work, but not for every function.

Sounds like you're primarily repurposing internal people to execute on these integration activities as opposed to sourcing.

For the most part, you do. You can use consultants once in a while. Right. It's helpful if you don't really have the legs to do it and if you need additional resources. A lot of folks who are internally have the context and understand the business, know the people internally. So if you have the right skillset internally, it's definitely more efficient, but it's not one size fits all. You're going to deal with a mega project, you need tens of integration people. You may not be able to hire them or may not have the right skillset internally. And then you can use external help if necessary.

Teach me how you hunt deals.

For us, it's always been you can only do few deals and if those are the deals that you're going to do, they have to be the most impactful. Those are the deals that probably do not come via inbounds for the most part. Those are the deals that you actually thought and restart. So most of the deals that I am proud of that we have done in my life were the ones that we source ourselves. We thought that through, we approached the other side and the transaction went through and it was successful. So large part of it is driven by internal strategy. What should we do? Should we consolidate in this market? Should we actually divest in this market? Or this is a skill set we don't have. We need these capabilities, we should acquire that. Or this is an agency business that is huge synergies for us, so we should acquire it. Right? So I think best deals come through that. So that's the first one.

It sounds like proprietary deals tend to be more aligned with your strategy since you've built it around it.

And also you probably, if you've done that strategy, you've probably reviewed that strategy with the board at some point of time. The board is supportive, right? Because in the end you have to make sure that the deal makes sense and especially if it's large, bring something completely out of left field for the senior manager of the board. They're like, this doesn't really make any sense, sense. Why are we doing that? So I think if there is a strategy that's aligned with the business and they've seen that and they know these are the targets we're looking at. You can also get their feedback early in the process. It's helpful. The second thing is, of course there is no one hand clapping. The other side has to be interested. So of course you want to acquire a few companies, but it may not make sense because the other person or the party may not be interested in selling. So they may sell, but the price wouldn't make any sense. It takes a while to develop that. So, you know, you stay engaged with those sites and then the time comes, you actually do the transaction. There were many transactions where we had the first conversation and still took two or three years to do the transaction because it took a year or two for both sides to figure out if this is really the right deal for both sides. The second one is, of course there will be assets that will come into play and often they will not be well advertised. You need to have a network either through other cognitive professionals or through bankers or consultants or private equity professionals. So that is all because there will be certain transactions we do because opportunistically something came in the market. Again, it happens. 99% of those deals won't make any sense, but those 1% do. You get a lot of inflow. So I think it's that. And the third set of deals will come through your internal net. You may be looking for a certain specific asset on the engineering side and they may be a CTO or a VP of engineering who comes to you, or even engineers. Oh, certain companies, pretty good. I've heard that about run off cash or I've heard that about raised capital. It may make sense to engage with the other side. That is also another helpful channel because you get an internal deal champion who actually thinks that deal is valuable. Again, you still have to do diligence and you have to make sure there are no vested interests. I think CopDev, in the end, and we can get into more detail, is the function that seeks truth. It may be really that this person wants to do the deal, but is it really the right thing for the business is super important. So then we figure out if it makes sense or not. But those are all the channels that you may want to look at. Again, that means that the deal flow is pretty large. A typical product will look at hundreds of deals. Some will be killed after one hour of analysis and research. Some will get killed after a week and some will get killed after a month, and some will get killed after a year. You have to decide where you're going to put the energy because you want to keep the team lean. If you want to go deep into every potential transaction, then you need 100% team. It doesn't make any sense, it's not cost effective. So I think really killing the deal at the right stage makes the most sense.

What are some PhD engineering hacks for managing the pipeline prioritization? Do you have a complex scoring formula? What does that look like?

So it depends. When you're doing a large landscaping work, you may need some scoring formulas. Right. But in them there's a lot of judgment called with these deals. So we keep a track of these deals because you don't want to forget two years later if you talk to them. So we keep an internal tracker for some of that stuff. But then you have to hold a lot of information in your head. That's what it takes. Need to have good recollection, good memory, and you need to have recall the conversation you had a long time ago. So I think taking down notes and we typically would circulate the internal notes internally, that's helpful to have. That's one thing I've always struggled with. This is just a more personal thing. Like I don't think there's a still very good tool to take electronic notes. Like none of the solutions still are perfect. I would love to be able to scan every note I've taken in my life and being able to go through that, that would help my life a little bit. But I'll confess I'm a little old school here. I used to take electronics notes, but these days I am back to pen and paper. I just feel just much more comfortable.

I'm big on pen and paper. Right now I'm on an iPad, so I'm trying it, which is nice because I work with an EA so she gets to see the version too and follow along. Fair enough. You had an interesting point about a lot of it's still in your head. At the end of the day, things that are important, really interesting, tend to bubble to the top. Any other things around pipeline in terms of just things to think through, we talked through the strategy. Here's your sources, you get them into some record to manage and how you organize.

One last thing is a lot of times when you have a conversation and you don't think that's the right fit at the moment, how do you actually keep that pipeline active for an extended period of time? Let's say this company was a great engineering company, has talent, but not the perfect fit for you. But let's just say they're going to do A down round or they're going to go out of business and they need to find a home. You need to build relationship that you are their first call. So how do you actually cultivate those relationships? Oh, this company was a great company from like a business perspective and you want to acquire them, but they didn't have enough proof points at that point of time. Like this is a great agency business I want to acquire, but I want to see more proof points before I actually do that. Because I don't really have the bandwidth and resources at my company to incubate you. If I acquired you, it's better you stay independent. But look, they were going to do a large round. They may reach out to you before that. It may make more sense. How do you actually keep that relationship alive is pretty important. People will use different best practices. For me it's always like just around the time of holidays, should I reach out to folks wish them holidays, investors, past colleagues, companies, VCs. It's a great way to stay active. So forcing that touch point sometimes is helpful and then it's not an easy job because there is no immediate outcome you're gonna get or get out of it. But I think that's where a lot of people, including myself, struggle.

I struggle with this staying in touch. I'm thinking of a deal now where I lost a really good opportunity. And it's one of those things haven't talked to the person in just over a year. Transacted and was like that would have been great for us to work with. There's the touch base in the holidays which we do. We take care of our clients really well. Like beyond that because there's got to be more to it to be methodical about staying in touch with people.

I have a interesting way to do it. I read stuff and somehow I read something that is very relevant to the person we talk to or we had discussed and I always send them a link. I read this super interesting or something that always sparks a conversation and then you do that. So for me it's always like reading something and connecting with somebody I talk to. And look, I actually like that myself. It is not related to work. It could be a personal thing with my friend who I talked to or company. I always like to read things and connect the dots and that's super interesting. For example, I had a friend we had talked about is in furniture rental business and I would read an article, oh, the shipping rates from Asia are becoming 10 times. This was like almost a year ago when that started to happen. I was like, oh, are you seeing this? This is crazy how difficult that has become. Or oh, the tanker is stuck in the Swiss cloud, whatever that situation may be. And then connecting and reaching out to the right people. I think that always sparks the conversation and people appreciate that. When you read that, you thought about that. People care about the personalization piece. Holidays sometimes feels a little generic. Oh, everybody's sending me holiday message and then it gets lost in the noise which you still have to do. I think it's like for some of the people it's a good touch point to do it. But I think the personalized checkpoint with people is super helpful.

I like that we've been trying to do events. Now I'm doing little local events.

Yeah, I think especially in the post Covid world when people are starting to meet again, those events are helpful. Like you go to an event, people are like oh, this is my first event in three years or something. I think it's always good to do some of this stuff in person. I like that managing remote teams is hard and we try to do that even internally. We try to an offsite to meet people. It's hard. But I think in person interactions it adds another dimension to it.

I like the news though. That's convenient, it's quick, it's easy. Get top of mind. Hey, we should catch up. Want to grab a conversation like to hear how things are going. What about new people? People you haven't talked to? I like a lot of your pipelines proprietary but just getting in the door when you're getting attention of a CEO. Is it automatic? This makes sense. Corp Dev Gopuff I'm going to get a big check. I'll take this call. Or do you have to be a little more creative than that?

Depends on the situation. Was it Uber? I have to confess I was lucky when you were working for Uber at copdev it was a position of privilege, so I should not ignore that. I'm sure that applies to many other companies. If you work at a cop dev and Amazon, Google and there are plenty of good companies, there's privilege. You reach out to people, people respond things. When you work for a smaller company, people may not have heard about you. It's more difficult. And I've been in that position as well. I've worked with smaller companies where it's harder to do that. So I think cold reaching out to people is very difficult. I think you will not really get the response. You always need to find somebody who will help you make that connection. And I think that's what I typically do. Like, I know people who know people. And that's typically the best way I reach out to a head of Cordel or a CFO, CEO of a certain company. I will go to their LinkedIn profile, see if we have some connections in common. And then you typically use that connection to help set up an introduction and then have the conversation. Sometimes you will not have anybody in common. That will happen as well. But, oh, this is a fun. But let me look at other people who work at this one. I need to talk to the cfo, but let me see if the CTO has any friends with me. You will look at the company and try to see common connections again. Then you have to use the connections that you trust. In between, it has to be somebody who you feel comfortable that they'll be okay reaching out on your behalf. And that's why, again, keeping those connections warm over a period of time helps. If you reach out to somebody 10 years later and say, hey, I need an intro, that's probably not really a good idea. You should have kept the connection warm. So it takes a lot of energy to do that, but I don't mind it.

Keep the relationship warm. Then when you do need the introduction, it's easier with the warm relationship. What does that look like? Just, Is it a quick note? Hey, I'm trying to get in touch with so and so. Can you send them this? And you write a couple sentences?

I try to avoid that. For most part, I'm like, haven't talked to you for a while. And I also need a favor. Can I chat? Sometimes I may not need a favor. I may not need to be upfront about it, but often I'd be like, can we chat? Let's catch up. And then catch up with that person, which gives you a touch point. And then say, hey, by the way, I also need to connect with this person. Can you help? And I would be direct, like, first of all, do you know this person? Because it's possible you're connected on LinkedIn, but a gazillion people are connected on LinkedIn. Is this person a B? Is this person you feel comfortable connecting? Because I don't want to put them in a spot that they have to say, yes, but the next time I call them, they're like, I don't want to talk to them because he may ask for a favor. Because I'm like, you don't feel comfortable. That's okay because it's not going to be helpful anyways. So then I can find another contact in that situation. But I think picking up the phone and talking to them in this situation is super important.

I get really pushed, get a good warm intro. You don't do a lot of cold calls, do you?

Once in a while I may have done it, but I think most people don't like cold calls. Right. It's tough. It depends. Sometimes you can reach out to somebody. Look, you're looking for certain expertise. It's somebody who is in your network because you went to the same school, you worked at the same place. You may not know them and you can reach out, hey, I'm looking for this. But it's like typically not super effective. But you still get a response. But you just reach out to somebody you have no connection with. It's not going to go very far.

Fair enough.

One of the most important things I'm sure for the different core dev professionals is what do they do next in their life. Some people like to do corp dev for the rest of their lives and some people don't. And I think that's fine. One great thing about that profession is you build a great network internally because you work with every possible function externally, because you work with a lot of different companies, you work with a lot of different investors, and you work with banks. So I think it's a great job to build a network that you can harvest for the rest of your life. I would say most of the jobs that people will find after their first job is often through network. So I think having a network, I think we've talked about it a lot, is super helpful either ways to source deals, even for your own career progression, that happens down the chain to do something like that. What we're doing now, like, I think networks always help get connected big time.

What's the biggest challenge when building? Scaling a function.

So I think the first one is you need to know what you're hiring for. What do you really want to obtain. The second is that you hired the wrong skill set. What are you going to do now? You've hired the wrong person, what do you do with that? And that's a tough one. And again, people will take different approaches. I feel like you should do an intense job at coaching. If you feel like you have not really had the person, give them a chance. And then if still hasn't worked out, you figured out if you can help them find another role within the same group, outside of the group. But just putting people in the same group, like where it's not working out is not really a great outcome. It creates strength for the function. The third one is like, how do you make sure that the function is interacting well with the other groups? Hot dev fails if it's not working well with the other groups, whether it's finance, legal, product and hr. So you need to have a team that understands everything that's going across the company. You have to build and scale your own function, but you have to be very well integrated with other people at the same time. And I think the last one that comes to my mind is from overall efficiency perspective, how do you make sure that you're working on the right set of problems all the time? Right, because we talked about staffing and if you scale the function inappropriately too much or too little, you will get the balance wrong. So I think that's the last piece.

That sounds like a good outline for a whole nother interview. You mentioned earlier, Corp dev's role is to seek the truth. What does that mean?

If you think about a deal, first of all, you're making decisions based on incomplete information. There will be biases that will come in, right? A person who may have seen a certain aspect of the deal, but not the other aspects may say, I want to do this deal, or may not want to do a deal because they're biased by that. And that is a bias based on their past experiences. There's a bias based on their function, and it could be a CEO's bias as well. Sometimes they may see that and sometimes they may be correct. And you can be wrong because that person or individual has more experience or expertise than you on a certain topic. So I think copdev's role is to bring that to light and have a very detailed, thorough analysis, which means, have I looked at every aspect. Did I think about this deal from a financial perspective, strategic perspective, integration. Because an executive may say this is a great deal, but you realize the integration of this thing is impossible. So you have to bring that to light and have a good discussion. Often what happens is because of the bias, especially if a senior exec has a bias, then you can't have a good discussion. Often corp dev wants to like, bring that discussion to the middle so you can have both sides of the arguments and discuss that so that you can get to the right answer. That's a very important role. And that means sometimes taking an opposite position as a stakeholder. Again, the other person also has to realize you're doing that to have a good dialogue. It's a healthy discussion to have. And I think corp dev brings that to life. And there are other functions that will do that as well. Like finance may do that as well. But I think Corp Dev's sole responsibility is to make sure we got to the right deal. And again, everybody will make mistakes. There have been bad deals made by many companies, but at least we had a very informed discussion and knew what we were getting into before we do that. Because M and A, unlike some of the other things, is a one way street. There's no coming back from that. If you, for example, you want to launch a business, you can do a pilot. M and A. There's no pilot either all the way in or not. I think it's just, you just have to be fully informed what you're getting into.

Biases are the root cause of bad decisions. We tend to be blind to those biases. So a lot of this is bringing that truth to the table, which may require some debates. Is there any framework or approach that you have ground rules when it comes to debates? To maintain it in a professional way? That's healthy.

Back in the day when we used to do consulting, and I'm sure you know that as well, we always said start with the answer first and then give the reasons why to do it. Which works fine in a lot of places. But sometimes we go, I would go in a meeting and say, please do not say the answer upfront and let's go through the facts so we can get to the right answer and unbiased. So you have to remove the bias. That's just an example of how you remove the bias. An example of bias is don't tell the answer front right. That's one. The second one is we always want to have discussion on what are the pros and cons. Even if it's a no brainer, always have a discussion on a slide on what are the pros and cons. The third one we always tend to have a slide is what are the things that can go wrong in this transaction? Before we do that, let's be clear upfront about it and what are we going to do about it. Also plotting what's the worst case scenario in this situation. If it does that, often people focus on the best case scenario and when we don't really know what the outcome is. I think having both the worst case and best case scenario are equally important. So we need to understand what that range looks like. And in the end, again, having the right set of audience to have that discussion is important. Like you're going to have just the discussion with the CEO, it's going to be probably a little narrow. So we want to make sure that the right functions are on the table to be able to have that discussion. I think the last one is the culture. That's super important. Can I actually have that discussion? So I will be upfront with my team and other people like, look, we're going to have this discussion. It's a tough discussion, but we're going to have it because our only objective is to get to the right answer, set that context upfront. I may be trying to be difficult in this conversation, but my intentions are to get the right answer. And if we get the right answer, that's going to be better for everybody. So setting that context is super, super important.

I like that. Building it into that culture and you really drive it in. You get emphasis on the cons, emphasis on the risk, emphasis on the worst case scenario. So those are really good conscious approaches to knock off the biases. Saurabh, I gotta ask you, what's the craziest thing you've seen in M and A?

I can't really go into details because I've seen way too much crazy stuff, but I think the craziest stuff I actually saw was I should stay away from specifics here.

Yeah, no names and dates, but you can tell everything else.

Yeah. One of the craziest things we saw in MA was one time we were working on a transaction at a company I'm not going to name. We were burning a lot of cash at that company. We had to do a transaction like ASAP to get that thing done. So we went from the first conversation to a signed term sheet to a definite doc, signed and closed in a matter of seven or eight weeks, which was so crazy given the amount of you do and you do it with six people or five people under 10 because it's like super confidential. But every month matters. Really proud of what we did. But also it was no sleeping for like eight weeks straight, working 1800 hours a week every week for an extended period of time.

That is pretty crazy. So thanks so much for taking the time. I learned a lot. This has been great conversation. I hope that I can get you back to talk about how game theory applies to M and A, because we didn't even get a touch on that, which I feel like would be an interesting conversation of its own.

Absolutely. We can do that. Great. Thanks for having me.

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