10+ hours of podcasts, in 5 minutes.
7 quotes from 1 episode on M&A Science, each with a timestamped link to the source.
Praveen Ghanta states that corporate acquirers destroy startup value through aggressive late-stage price renegotiations and slow integration systems. Corporate standardization after one transaction caused an acquired software engineering team's speed to plummet by 70%.
Turning a standalone software product into a free suite add-on eliminates the revenue founders expect during earnout periods.
“Pricing it became much more of a like okay this is part of a suite now you can just give it away for free if you want…”
From Why Orion Crushed HiddenLevers' Product Velocity After M&A
Acquirers pay for fast software innovation and immediately jeopardize that talent by mandating slow corporate processes.
“I think if I were on the other side, I would look at, okay, I'm buying innovation. I'm buying kind of that kind of talent. How can I let that prosper a little bit and not drag it down to the speed of like, you know, there's times when you got to move slow, but hey, we're trying to do this for innovation reasons. How do we keep that?”
From Why Orion Crushed HiddenLevers' Product Velocity After M&A
Buyers exploit impending deadlines by treating due diligence like a home inspection. Waiting until 24 hours before expiration maximizes the pressure on founders to accept arbitrary purchase deductions.
“You sign with the buyer and you're at price X. And then a crafty realtor on their behalf will wait until the day before due diligence expires and then mention that, oh, by the way, we've got like this whole list of repairs that need to be done that our inspectors found, and we're going to cut 20k off the offer.”
From How HiddenLevers Beat a 50% Retrade 24 Hours Before Closing
Fast-moving engineering teams lose their technical edge after acquisitions. Imposing legacy project management systems onto these newly acquired units drops the pace of shipping code by up to 70%.
“We haven't fully integrated the team into Orion processor, but we can measure our own velocity. You know, we know where that is. Apples to apples with sort of the rest of Orion and it was somewhere between two and three times higher than the average team at Orion as of when we were acquired.”
From Why Orion Crushed HiddenLevers' Product Velocity After M&A
“…to my dismay, by the time I left, they had succeeded or perhaps shortly there after they had succeeded in dragging us down by 70%. They had succeeded in slowing the pace of innovation down.”
From Why Orion Crushed HiddenLevers' Product Velocity After M&A
Diligence teams present broad liability estimates, like uncollected sales taxes, to justify purchase price cuts. Founders successfully shrink these estimates by mapping contracts state by state and removing specific software fees.
“Anybody who doesn't want to do that and get into the accounting weeds and slug it out with accountants, well, you better have armed your accountant to do that job…”
From Defeating a $600K SaaS Sales Tax Retrade in QoE Diligence
“I think there was a first round that the board rejected…”
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