Corporate Development Strategists from Oracle, Sun and Others Share Experiences and Practical Ideas During Garage’s STATE OF THE ART
Corporate development executives from Cybersource, Oracle, Sun, TIBCO and others were among those who shared advice for creating successful mergers and acquisitions with entrepreneurs and investors who gathered under the auspices of Garage Technology Ventures’ recent STATE OF THE ART seminar, “Making M&A Work,” which was held March 13 at the Quadrus Conference Center in Menlo Park.
The strategists were in consensus on many points, including the current active interest in M&A in the market. Experienced entrepreneur and participant Edward Snyder put the opportunity and timing into perspective: “Several thousand VC-backed companies in the Valley must find some exit in the next 18 months,” he said, adding: “About 10% of the falling stars have tremendous value.”
“M&A is generally viewed as an exit-only strategy by both investors and entrepreneurs alike, especially in today’s harsh environment. But it can be a thoughtful next step in the process of creating long-term value, as well as liquidity. The strategy of consolidation can both advance and expand a business,” advised Alex Bernstein, Managing Director of Garage Technology Ventures.
Garage CEO Guy Kawasaki led panelists in a discussion of M&A as a strategic weapon, exploring both offense and defense strategies, and the kinds of deals most likely to get done in today’s environment. Panelists included:
- Douglas Kehring, Strategic Advisor to CEO’s Office, Oracle Corporation
- Ram Menon, Chief Strategist, TIBCO Software
- Brian Sutphin, Vice President, Corporate Strategy and Development, Sun Microsystems
- Steven Tonsfeldt, Director and Head of M&A, Venture Law Group
Other speakers included veterans of M&A with both buyer and seller experience, including Dave Daetz, Senior Vice President, Corporate Business Development and Product Marketing for Cybersource Corporation and Edward Snyder, career entrepreneur and turn-around CEO, as well as veteran VC Mahesh Kanumury, general partner of Gabriel Venture Capital.
“We were delighted to serve as the catalyst to bring together such an esteemed group to discuss the important issues confronting buyers and sellers,” Kawasaki noted.
Among advice dispensed by the group:
Veteran business development executive Daetz, formerly of Symantec’s M&A practice, underscored the need for clear strategy and process in his lessons learned from the buyer’s perspective. He also stressed the value of bringing in outside advisors, including bankers and lawyers, early in that process.
Venture Law’s Tonsfeldt concurred: “The one mistake I see most is bringing in outside help too late.” Tonsfeldt also encouraged entrepreneurs to have a plan and recommended they engage their board members for introductions into larger potential buyers. ” The most effective avenue into larger public companies is through your board. Well over half of all deals I see are (initiated) through the board.”
Sun’s Brian Sutphin agreed board members and VC recommendations were excellent sources for corporate business development groups. He also advised entrepreneurs to do their homework first: “Nothing is more persuasive to us than a clear demonstration of synergy – how the company’s technologies and people will advance Sun’s over-arching strategy.”
About Garage’s M&A practice
Garage advises technology companies on buy-side and sell-side transactions through its M&A advisory services. Garage brings extensive acquisition experience, a world-class Rolodex, and the deep industry knowledge crucial to lead companies through the process.
On sell-side assignments, Garage works with promising venture-backed companies that have viable businesses, unique technologies, and a track record of sales, but are nevertheless not likely candidates for an IPO. For these sell-side candidates, Garage provides market and financial analysis that helps determine the best course of action. Garage utilizes its high-level contacts at public and private companies to make introductions to likely acquirers.
On buy-side assignments, Garage leverages its institutional focus on private technology companies to provide acquisition prospects to acquiring companies. Garage assists buyers in their review of potential target companies and throughout the acquisition process.
About STATE OF THE ART
STATE OF THE ART is an ongoing series of invitation-only industry-specific events, hosted by venture capital investment bank Garage Technology Ventures. Garage’s objective is to bring together private equity investors, industry thought leaders, and spotlight emerging technology companies in discussions about future technology trends, business models, and investment opportunities in the selected sectors.
About Garage Technology Ventures
Garage Technology Ventures is a venture capital investment bank for high tech companies and investors. Garage Technology Ventures offers private placement and M&A advisory services, as well as direct investment, for companies in the enterprise software and network infrastructure sectors. Since 1999, Garage has completed 88 transactions raising nearly $400 million in venture capital for clients including Business Layers, Digital Envoy, Digital Fountain, and Tripwire, among others, through its wholly-owned broker/dealer subsidiary, Garage Securities, Inc.
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All securities and securities-related services are offered by Garage Technology Ventures’ wholly-owned subsidiary Garage Securities, Inc., member NASD/SIPC.
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