What founders need to know about acquisitions: Shopify’s Daniel Debow on M&A lessons from selling three startups

Daniel Debow  

You don't actually sell your company to another company. There is no such thing as a company. It's an imaginary legal construct. There are people who work together as a group. This might sound like semantics, but it's not. Because once you understand that, it's like, okay, I have to actually convince some people that they want to buy my company, it becomes more of a tractable problem. Or like, I have to sell my company to Twilio. Well, no, no, actually, you have to get Jeff Lawson to see that this thing is a solution to a problem that they have. And that's very different.

Brett Berson  

Welcome to in depth, a show that surfaces tactical advice founders and startup leaders need to grow their teams, companies and themselves. I'm Brett Burson, a partner at first round, and we're a venture capital firm that helps startups like notion Roblox, Uber and square tackle company building first. On the in depth podcast, we share weekly conversations with startup leaders that skip the talking points and go deeper into not just what to do, but how to do it. Learn more and subscribe today at first grande.com. For today's episode of in depth, I am thrilled to be joined by Daniel debo, a VP of product for demand at Shopify. Daniel is a repeat founder, his most recent startup helpful was acquired by Shopify in 2019. Before that, he co founded ripple, which was acquired by Salesforce in 2011. His first startup work brain was acquired by Infor in 2007. Given Daniel's gone through this process of starting a company and choosing to sell it to an at scale business multiple times over his career. I'm excited to share his advice on how founders should approach the m&a process today. I think navigating acquisitions is one of the more underexplored topics in company building. And it's especially relevant right now. Given that more founders may be considering the acquisition route these days. In our conversation, we go over everything a founder needs to know about the m&a process from top to bottom. We start by diving into what established companies can do to create an environment that attracts founders, as well as what conditions founders should look for. In a potential acquirer. We also explore the concrete steps founders can take to build meaningful relationships with executives of all types, not just the corp dev team. Daniel shares tons of useful tactics from How to Spot clear buying signals from potential acquirers to the numbers all founders should lead with during initial conversations. He also shares his do not do list for first time founders going through this process. We also get into the techniques he used to involve investors in the m&a process, and how to communicate about a potential sale to the broader team. We end on his advice for succeeding inside a larger company post acquisition and making the transition from founder to employee. This episode is a great listen if you're a first time founder exploring m&a, or a recently acquired employee that's now operating inside a larger org. But I think there are tons of great negotiating and sales tactics that anyone can draw from his experiences. And now my conversation with Daniel. Well, thank you so much for joining us excited for the conversation.

Daniel Debow  

Absolutely. Really glad to be here. Thanks for having me.

Brett Berson  

Maybe one place to sort of start is given you been on the entrepreneurial and founding journey a number of times, you've also sort of operated as an executive at scale. What do you think is great about being an employee? And how would you compare and contrast what's great about being a founder,

Daniel Debow  

like most things in life, they both have pros and cons. And look, I think probably a few things. One is you have the scale and scope of a business so that when you launch products, or you want to update them or grow them, there's this natural distribution channel that you don't have to fight against when you're starting your startup. Second, there are people around you to help you and support you that does not exist inside of a startup. Third, when you call people pick up the phone, I'm calling from XYZ is different than I'm calling from, like google.com, or wherever it is never heard of them. I'm not answering your call. So I think those are some of the real benefits that you have inside of a large org. There's a lot of very smart people who are there. And I think the last one, there is an existential terror that faces you almost every day as a startup founder, right? It is a level of stress that is really hard for people to appreciate. It's not that I don't have a stressful job today or that people who are execs in big tech companies don't have stress on their heads. They do. I just found that personally it is a very different level of intensity. And so it's a little bit more sustainable in terms of lifestyle. And then what's great about being a founder well I'm sure the people listening to this have some understanding but it Is the blade palette it is the freedom it is other than your board or your investors, which is a real thing, not having a boss, it is the ability to go make massive change it is the people that you work with, you get to create the team, the culture, the opportunity, and then also speed like you can go really, really fast. So there's great things about being in both places. So

Brett Berson  

in the context of an at scale business that's either acquiring companies and talent or has decided they want more founder oriented entrepreneurial talent inside of the company. What do you need to do? What are the conditions you need to create to allow that to happen if you're operating in that scale business,

Daniel Debow  

I think there's a bunch of different components of that. Certainly, you have to have a really effective profounder m&a function. That means people who are seen as helpful people who are seen as honest, straightforward, you have to have a process that is founder friendly, right? I think you have to have executives, who are friendly to founders, and it doesn't have to be other founders themselves. But people in the company who are there to sponsor support, guide, mentor, and teach people when they come in, not all founders know everything. And certainly the transition from being a founder to being an effective executive can be challenging for people. And so you have to have people who are willing to mentor and support and see value in what founders can provide, and also maybe forgive their trespasses a bit, because sometimes they are a bit spicy. In my experience, it's totally crucial to have a CEO who appreciates and values founders. And I've been lucky in both instances where I ended up to join companies, having co founders who deeply respected the mindset of a founder talked about it openly, and made space in their time, whether it was like lunches, or offsides, or whatever to like, create a community of those founder type folks around it. I think the last thing and something that Shopify, where I am right now is just like openly say that you want people who have that entrepreneurial experience when you're hiring. So founders don't have to come necessarily through acquisition, people who've tried things started, companies demonstrated type of grit and Ownership mindset, that is a really good indicator often of success. And so actively making it part of your recruiting criteria isn't really helpful.

Brett Berson  

You mentioned this kind of a little bit. But what about org design or specific rituals inside of a company, that positions founders coming in to have a big impact? And hopefully retaining the company?

Daniel Debow  

Yeah, that perennial question around the org design, which is like, Hey, do we take this team? And we own them? And we let them kind of keep running on their own? Or do we assimilate them like the Borg very quickly, as fast as possible? I think the answer to that is somewhat case specific. Depends on the scale of the businesses be acquired. I mean, is it an operating business? Or is it really a founder early on that product market fit or just getting scale? And so you'd have to calibrate what's appropriate. But I think the key thing is understanding one size does not fit all. And it is very, very easy for a large organization to completely crush a small organization by just making a few of the wrong choices. I think related to that isn't just the org structure is who are the sponsoring executives, because I think those can make a really big difference of the energy and positivity that comes when an acquisition happens, or lack thereof. I also think actually, a really important component is that the m&a team that does these things sort of takes ownership and sponsorship of the success of founders as they move through the organization. So it's not like, hey, we bought you and we're on to the next one, but we actually care about you. And they check in, they make sure those folks are doing well they talk with the execs around them, I kind of act as an extra layer to really support the founder and the team around them so that they're successful. And I think it's a really smart thing for that to happen, especially when you're acquiring primarily talent, right?

Brett Berson  

How does some of the ideas that you shared maybe express itself in your last journey, when you were building ripple for a number of years, and then got acquired by Salesforce and then spent almost four years building at Salesforce?

Daniel Debow  

Yeah, I was acquired by Salesforce at a time when Marc Benioff was very much like I want founders, I saw a few practices that were really positive. I mean, one I alluded to, which is Mark made time for founders, he would have quarterly lunches, everybody was different, I guess, but I knew that I was always able to find time with him. Second, he would kind of bring founders into conversations where they weren't supposed to be by normal corporate ladder structure. So that occasionally happened where we you know, you get a note from Mark saying, Hey, can you get on the plane and come to this meeting with come have dinner come see what we're doing here. Third was related to that if there were like, top executive offsites top 100 would get that call get the opportunity to be there, get a chance to network with other peer executives and kind of be into the loop of things. And then you know, something that I actually will take a little credit for at Salesforce was I remember saying like, Hey, can we just get everyone together? Because a bunch of the founders we would see each other at these like regular events, but we never like had a thing for us. So we did do that he's Mark was like Send him a note. He said, Yeah, sure organize it. So I did. And then I think continued on. And I think it's been a great tradition. And we definitely do something similar here at Shopify, we're founders get together once a year. And then it is really both fun, but also productive thing for retaining founders.

Brett Berson  

Are there things that you learn specifically from interacting with Benioff that you've taken with you as you continue to build companies and products,

Daniel Debow  

I learned a lot from him, both by watching and being around the organization. I think the number one thing was, he is a visionary in terms of talking about where things are gonna go. And being able to articulate that I think I learned a lot about storytelling and marketing from him. I learned a lot about mass media and understanding, centering. Often startups and marketing people are very focused, or like startup CEOs, or founders are like, this is my one chance to tell my story. And one thing I definitely learned from Mark, we were launching a product and it went, well, a lot of press coverage. In maybe two months later, he's like, great, we're gonna launch this again. And I was like, Mark, we already launched it. And then he's like, Daniel, do you think anybody really remembered or noticed, like, there were 1000 new stories that day. If we do this, again, with a slightly different variation, very few people are gonna notice that I'm paraphrasing. So Mark, don't get back to but it was like, we're gonna launch it and the launch of the game and then launch the game. And I was like, wow, that's kind of great, because she was aware of how the rest of the world saw in rather than the way that we often see it, which is like, everybody's paying attention to me. And his point was like, no, no one paying attention at all, you have to really repeat yourself and be out there a lot to get attention, especially today.

Brett Berson  

So wanted to sort of take a left turn and talk a little bit about actually running an m&a process. As a startup. I think that this is an area that's just like highly under discussed, I think it's one of the few areas in company building, that still like a black box. And given that you've done it multiple times over your career where you started a business and chose to sell it to an at scale business. I thought we kind of explore that area, and maybe hear some of your ideas around. How should a founder think about it, and execute on it. Let's say it's a founder that's reaching out to you for advice. And they're like, Hey, I'm deciding whether I want to sell the business and how to go about it. I'm sure you get those calls all the time. What if I listened to like five of them? What are the commonalities in terms of perspectives or ideas you tend to share with those founders?

Daniel Debow  

Yeah, that I do. I've been lucky. I've invested in a lot of great companies and a lot of great founders. And they do get those calls. The first question I asked, and by the way, it's the same question I asked when they're like, How much money should I raise? What should I do? When should I do it is always to ask, What do you want from this journey that you're on? And it sounds a bit philosophical, but it's really important. I mean, one of the beauties of being a founder is you have autonomy, generally, and self actualization, and you're on this journey to do it. That's probably why a lot of people want to do it. So the question is, are you trying to maximize the amount of money that comes like you're trying to stop the pain that you've been going through? Because this has been so hard? Are you trying to move into a different risk return profile? What is it that you personally want? What would make you happy? And I often think that is a really important place to start. Because, frankly, that's not often asked of the founder, there's so many other people who have a lot of interests going, but I think that's a pretty important question. The second thing is to don't believe your own bullshit, and have a really accurate assessment of where the company really is. And what are your go forward prospects like what has to happen for you to grow into the valuation you just accepted? Or for the next round? What do you really think is happening with your pipeline. And this is hard for a lot of founders, because you have to live in this like dual state of like, everything's awesome, and everybody's excited. And then like, inside, you're like, oh, it's all horrible. But that's hard. And that's found your life all the time. But you have to kind of be pretty honest with yourself about where this is. Because you do have responsibility more than your own needs. For self actualization, you have a team, you have investors, and I've always viewed that as pretty important investors, you have like a sacred trust to these people they trust, you should try and do the best you can for them, especially employees as well, these are people who believed in you. So that's probably where it started is like, what is it you want? And where are you realistically as you start to go down the path of like, should you sell? Or how do you go about that sales process.

Brett Berson  

And so we can come up with some hypothetical scenarios, let's say that you've been building for a while the company is kind of working, but it's not on fire, it's most likely going to be hard to raise more capital. And you know, you've only raised five or 10 million. So you're in a position where you could find a landing for the business, for example. And let's say they want to balance both getting the right price, but they also don't want to be an indentured servant forever at a heinous company that they're going to hate waking up every day. And so they're looking for some pragmatic outcome. What should they actually do? Like, I'm excited to chat about this with you because I actually don't know that most founders in that position, even know where to begin. Now, as they think about exiting the business.

Daniel Debow  

I think you have to get rid of this mindset of like, am I going to sell the company? The answer is you We will sell the company, everybody sells a company. Let's be clear, when you sell shares in your company to a venture firm, you have sold part of the company, the question you're really asking is, do I sell all the company now or just part of the company, because if you're gonna go raise money, you're still selling part of the company, you go public, you're selling the company, right? You're gonna have to do it. And so you can do that in different flavors, but the 01 Like, I'll never sell, it's never gonna happen. I think that can be destructive. And so there's probably a more realistic assessment that you're in somewhat of that middle ground. Okay. But to go back to your immediate question, I think the first thing I think about, of selling the businesses, and you're right, I've been part of a few of them and definitely helped a bunch of investors go through the process is, okay, thing one is, you don't actually sell your company to another company, there is no such thing as a company. It's an imaginary legal construct. There are people who work together as a group. And that means that you're going to have to sell your company to a group of people who happen to work together in a company. This might sound like semantics, but it's not. Because once you understand that, it's like, okay, I have to actually convince some people that they want to buy my company, it becomes more of a tractable problem, or like, I have to sell my company to Twilio, I have to sell them to Twilio? Well, no, no, actually, you have to get Jeff Lawson to see that this thing is a solution to a problem that they have. And that's very different. So when I think about the steps that one has to go through, first of all, I actually think if you can, you should not start this process, when you're at the moment that you're at, which is like, wow, it's grinding, I might be able to raise money, not like, you should always be thinking about building relationships with executives, at large companies. Maybe this is contrary to what others would say. But these are business develop relationship, partnership relationships, and yes, maybe they are acquisition relationships, you don't have to be as explicit. But I can tell you, it's sure as hell explicit when you call up and you're like, hey, we're running a process you want to buy us? Well, that's actually not a great spot. But it's a great spot. If you're like, have met an executive who runs a business unit that is complimentary or competitive, or whatever it is. And you're like, have met them five or six times and industry events are you gone in for conversation, and you maybe have a mentor relationship? And you're like, Hey, I'm really thinking about what the next steps are. And I know you have this issue or this problem, and I was wondering whether we could talk about whether I can help you solve that problem. That's a different conversation. And I think that it is something that we did definitely at ripple definitely had helpful was we maintain relationships like this all the way through the journey. It's not like we were in a sales process. It's not like we were trying to sell the business all the way through. But we kept them sort of in the air and real. And we're like actively using it as a way to figure out what was going on in the market. But then when the time came in this thing, kind of coalesces. It was very natural and normal to call up five or six people and say like, Hey, should we have this conversation? And they trust you, by the way? Because you're not giving some bogus? Oh, yeah, you know, eight other companies really interested when you're like, No, really, there's like, there's a couple other people, I'm probably going to axe it, you want to talk about that. If that's the conversation, you're way better spot to begin with. But that, to me is one of the most important things to understand is you sell it to a person, an executive, who has a problem. And usually you as the CEO, we're going to go work for that executive or the solution, you're going to take your IP and your company and your team, but also yourself. And so you really want to build that relationship of trust, well, in advance of trying to start a process. So that's

Brett Berson  

a good framing, and a great place to jump off from any thoughts on how to go about building those relationships. And maybe what to do in those conversations. That's not just a bunch of random catch ups, because I assume one of the important things is as you're interfacing and starting to build these long term relationships that might provide value to you in all sorts of different ways. Like you need the person to think you're awesome, and smart and good. And so I'm curious if you have thoughts on what you should actually be doing in those meetings, or how to structure it. So it's not just a bunch of random catch ups?

Daniel Debow  

Yeah, that's a great question. Well, first of all, it's not the end of the world to have a random catch up. But I agree, you can do a lot better than that. So the first point is like map out who in the industry, who are the organizations that you think could be likely partners requires, right, and partners is a real thing, like definitely can be in their ecosystem, you could do an equity investment. It's a continuum of that conversation, our conversation with Salesforce when we were acquired was about them investing in us. And then as the journey unfolded, the m&a team and Mark just decided, like, we're gonna buy this company. So it doesn't have to always be as explicit. So what is it that you want to have as a useful conversation? Well, where are the interests aligned? Where's something that you as a startup have that would help this big company sell more, sell faster, sell in a different way sell to different market? How would it make their product better? It's on you as the startup to kind of paint that picture. One thing that just blows me away, and it is something I've done before, I mean, in fact, I remember meeting with Mark and what I did is I spent time with one of my designers and I said like here's the Salesforce you UX, let's design what it would look like for ripple to exist inside of that UX. So when we went there, and we were talking about partnering, you know, it wasn't just imaginary, like here, we've thought it through this is what it looked like, let me take you through the steps of how this will be used, what we the use cases, that is value added. And that is helpful, right? Like that is like, okay, I can see you're painting a picture a storytelling about how these two teams can work together. I think that is pretty helpful. So how do you find these people, I think that's part of the magic of being a networker, as a CEO, you're gonna call your VCs, you're gonna go to industry events, you're gonna go and network your way to get those important connections and invitations. I think another tactic that is useful is just sharing information. You don't even have to have a meeting all the time is like, Hey, I read this article, I thought, this is interesting. What do you think about this, I found this thing happening, we've seen it. I get those emails from founders all the time, I'm actually quite appreciative often when they're sort of trying to connect with me and tell me what's going on. I think, actually, it's probably worth also saying is, there's an important moment when you have to tip from like, Hey, I'm just building relationship with his partnership, it could be this to like just being direct. Because I think there is a real frustration on the opposite side, when a founder is being too smart to cute. And you're like, it's clear, you're running a process, it's clear, you're trying to sell your company, but you just simply won't say that, that is not helpful, like just say, and they're gonna know and they're gonna be able to run through it. Often the company can move quicker if you're explicit about what's going on.

Brett Berson  

You talked a little bit about this. But are the ideal people just senior GME product lead type people that operate in complementary spaces? Because I think to your point, a lot of founders who haven't sold businesses think that everything's about the m&a team or corp dev team. And in some cases, that's the case. But in most cases, I think you did a great job of articulating, it's about finding a business leader who has a specific problem that your team or your product solves for them. And so just anything else on who the best types of people the appropriate seniority to senior to Junior, anything to keep in mind there.

Daniel Debow  

Yeah. So first of all, I don't like the rules of thumb, like never talk to the corporate m&a people, they're terrible. That is a very bad piece of advice. In my mind. Sometimes they're really good. Like I remember, for us at Salesforce, it was Vilchez, who's now a partner at two sigma, a great VC. But he was running in May, he called me on the phone cold and said, hey, you know, we've we've seen your stuff, do you want to talk, and we just became friendly, like, we talked for a while, and he then opened up a lot of doors to introduce us to people. Inside the org, we didn't really know that many people and helped us to map out but it was a patient process where we're like, we would build relationships, and he helped guide us. So I don't know if it's this is a universal truth that you should not work with or trust those folks. But I do think if you're picking up from me that like it is far more important, inside of a company to understand that like, very rarely does m&a have the ability to just buy a company. I think Shopify has one of the most advanced and interesting approaches the people who run our m&a team, and we don't even call m&a called product acceleration. And the people who run it are like very senior product leaders. So the person who used to run our platform business, the person who used to run our talent acquisition, the person who used to run our marketplace business. So yeah, I think there's no, you shouldn't be scared of the those people in the right way. Having said that, it is almost impossible for a corp dev team to acquire a company without some sponsorship from a senior executive inside of it. In fact, it isn't possible, someone has to put their hand up and say like, I own this thing. And also remember, often most companies like hey, you are running this business, you have 300 heads allocated to grow for next year, you have 3000 people who work for you, whatever it is, well, if they buy your 50 person company that's 50 heads out of that 300. It's usually like this is a cost I'm gonna incur. And I'm just making a business decision to acquire this company to accelerate where I need to get to. So it is vital that you build relationships. But to your question about does it have to be the GM though? No, it doesn't have to be. I think it's a great idea to build relationships of high technical connection, where like technical people inside of a larger org really trust and respect the technical people in your organization. If you're a technical founder, building that relationship with engineering leaders matters. But in all cases, the commonality is, as you pointed out, you are solving a problem, a business problem for a business leader or technical leader at the acquirer.

Brett Berson  

Anything else on the idea of understanding the psychology of the buyer that a founder might not know or is useful to keep in mind as they're navigating something like an m&a transaction?

Daniel Debow  

There's a few things but one thing that's really important to understand is that executives in big companies who are tech executives are not VCs. And what do I mean by that? I mean that like if you're experienced in raising money or going through a transaction, which is a transaction is trying to create a frenzy of of To VCs who are bidding against you, you know VCs want to win the business, they want to win the deal. And frankly, they'll put up with a bunch of founder bullshit. And not always like they're not, you know, VCs, a walkway and say, This person is not acting with an integrity or they're being flaky. And I don't want to do business, but their level is higher, because they don't have to deal with you day to day, they just need the results. And you're part of a portfolio of bet they're taking. And so the dynamic and the forgiveness of quirky behavior, or arrogance, or excess commercial behavior is much higher in like, every VC knows, you're just pushing for the highest valuation, you're doing this stuff. And okay. When you're dealing with corporate executives, they don't want to have wildcards that they're dealing with. And if you act like someone who will not be a team player, when you show up, if you act entitled if you're arrogant, if you're not a listener to the person when you're having a conversation, if you act as if, oh, yeah, of course, you have to bite me because you guys are idiots, you don't know anything? Well, it's just human nature, they don't necessarily have to pull the trigger, they might be like, I don't want to work with this person. And I think that's actually a really important point, like, no matter how much you get paid, you're still going to work there for a while it is very rare for an acquisition to happen with founder doesn't have to sign up for a period of time, 18 months, two years, three years. And so what that means is like you're sitting across the table from this executive, you have to make them want to like you, because they're gonna have to work with you for three years. And it's job injury. Like it's just that simple. And so if you act like a flake, or jerk, or arrogant in the way that maybe you thought you could have gotten away with when you were raising funds, that is not going to play well. And so I would definitely suggest that is not an attitude that will go over really well through that m&a process. How do your ideas

Brett Berson  

map to the person that reaches out on the m&a team and is interested in talking to you a year into the company? Given what you've said, is it when people inbound you your strategy is to take a first meeting and nurture that is kind of the default? Or how do you think about it?

Daniel Debow  

No, I mean, look, there's nothing wrong to say like, Hey, I'm super focused on building the business right now, we're no interested in selling the company, what I would really love is to do a call with you in a month or so. And if you could bring an executive who would be relevant to us about how we could partner with you, that would be a really great conversation that you could have. That's totally respectful, totally reasonable for you to do. And, you know, I think it's fair and incumbent upon the m&a team to do that. Often, the m&a teams will be tasked with like, go talk to 40 companies in the space or 20 companies gather up a data set so that you know, an executive can then evaluate who are the ones they want to talk to, I think it's okay for you to push back. The other thing you can do is you get that call, you're like oh XYZ company, we're who do we know there? Who's the Exec? Where's this coming from? If you don't feel you want to go direct to the corp dev route, and just kind of give all the data? When I say build relationships, I'm not saying get on the phone and say, here's all the stats user arr. Here's how much we're growing. Thank you very much. I wouldn't recommend that. I don't think that's good.

Brett Berson  

So we're going to come back to the actual transaction process. But something we haven't talked about. How do you think about involving and talking to investors about this in maybe just at the very beginning, there's often trepidation. There's a lot of implicit or explicit pressure that a founder feels to never quote, give up, and just build this thing forever. What about having those conversations with your investors,

Daniel Debow  

I just have found that the best relationships are one that are fried, located upon honest and mutual understanding of interests, and being honest about and look, hey, let's be honest, a, me and Mr. Investor, we are very closely aligned, but not entirely aligned, primarily because this is my entire bed, and you have multiple bets to make. But we're pretty aligned. And we both want to do the best we can and race and dwell on this investment. Right? And I think if you can have conversations like that, you're better off than being squirrely in information controlling. I'm not saying you have to tell everybody who's in your deal. But it's much better to have one or two investors, you build a custom thing of trust about? And you're like, Hey, I'm exploring this, what do you think? And they might say, well, that's a bad idea right now. That's okay, that's good. Get some feedback, get some advice on how to do it. But like, you know, investors are not happy when you're like, everything's amazing. We're gonna go crush it, and then you show up, you're like, I've got this m&a deal, I want to sell the company. They're like, what what happens? You have to get them to where you need them to be about why it is the right decision. And that takes time. It takes honesty. These are your partners in the business, they have invested money, they're real human beings that have put time and energy into you, you probably should have a conversation. And I don't think that being realistic and pragmatic, is a bad thing. Like, I don't know who told every young founder out there that like, you have to say I'm building the next Tesla. If I die before getting there. That's the only two outcomes I get to like zero or trillion. Most VCs are pretty sophisticated. They understand that there's a range of outcomes between SpaceX or Tesla, and a hole in the ground, there's lots of happy outcomes actually in the middle. And sometimes I think they're like pragmatically happy. If you're like, Okay, this isn't working as well as we want, or like this exit is probably not going to be 6 billion, but we could do 50 million today, everybody gets their money back, or maybe makes a little bit and move on. That's better, I don't think you'll lose face with a sophisticated investor, by being honest, and pragmatic. I think what's worse is you show up and you're like, I'm running out of money, it's either we have to sell for this and we're dead. Like, actually, it's better to be like, I think we might not make it, we should do this thoughtfully, we have time to figure out how to do this. I think every VC I know would much prefer that. Just an honest conversation, than being so full of bravado. And by the way, this actually just go to another point. Which is, I think, founders, by being exclusively focused on getting the highest valuation for their companies, they kill optionality for what they're trying to do. And when I say, highest valuation, in a funding round, I'm not talking about the exit price. But you can price yourself out of a really happy outcome for everybody. Because the price that you really insisted on was so high that the press stack is so big, that nobody's gonna make money other than the people on the press stack. And therefore you have no options. You want to maintain a range of possibilities all the way through the journey, as best you can. And part of that is like, what is the valuation you're raising, to get to the next level, so that if you do get to a place where like, Yeah, we actually would want to exit. Instead of having like, there's only two people in the world who could pay this much to get everybody money back, there's actually 25 companies that could acquire you, and everybody would be happy, that's a better place to be in my mind,

Brett Berson  

I think it's oftentimes more so amount of dollars raised than it is specific valuation, but those two things often go hand in hand. And you oftentimes remove the potential for a win win sort of dynamic, when you start to raise very, very large amounts of capital, particularly before something's really working. I think that's probably under appreciate. I also think to your point about working with relatively sophisticated investors, I think, particularly when you've raised call it 510 15 million, the business model of a venture investor is that you have a very small number. Most of the time, less than 5% of the investments that you make that are power line drive the whole business. And I often have found that founders, overthink about their investors and try to cater to them around the m&a process, particularly if it's a good outcome, but not an amazing outcome. And they end up sort of putting themselves in a terrible position to get their investor another three cents on the dollar. It's a big part of the way that we think about the world. I think, good investors, I think there are bad investors that would be happy to get another two cents on the dollar, even if it meant you were at some horrible company you had to deal with. But I think in general, if you have sophisticated good investors, you should actually be optimizing, not on the margin for another two cents. But like, to your point, what is the best next chapter for you in the business over the next 235 years?

Daniel Debow  

I completely agree with you with one caveat. So no question sophisticated investors know, it's a long term game, they know that they want the founder, and also, frankly, all the future founders who often come out of an acquisition because they saw it, and they learned in there, like, I'm gonna go do my thing. They want them to land in the right place with the right opportunity, and everybody does well, and they're willing to trade off a little bit of, as you said, weights on the dollar, generally, with the caveat that you treat them with respect all the way through, if it becomes just about money, you're the enemy I'm gonna max out, then they're not going to have as much patience and time for like, well, what's the right outcome for this founder, if you, if you as a founder, treat your investors as partners and treat them with respect and transparency all the way through the journey, and they know that you are trying your best to either get them the money back or get some amount of pennies on the dollar. I think they have a lot more patience for like, okay, let's find the right place for you. And let's get the right deal. So that you're not miserable for the next two or three years. Yeah, totally

Brett Berson  

looping back to the process. So let's say that a founder has taken your advice. And over the last couple of years, they started to develop a handful of somewhat substantial relationships at five companies that may be a fit to acquire their business. What should they do now?

Daniel Debow  

I think the sort of high level is you want to start with your most likely and most close and feel them out, have a conversation, as I alluded to earlier, try and be relatively upfront. And you want to try and get your somewhat solid opportunity. Or maybe it's like a, this is a bit of a game theory, but you got to try to like pick the one that you think is going to be most likely to be like, yeah, we're really interested. Because one thing I've learned is it's way better to not bluff. It's way better to just tell the truth meaning, you call up the other day, like, hey, there is a very serious company very seriously interested in buying. As I know, we've talked four times over the past three years and I know we have to talk about how we can help you with this thing. If you really think that's a thing that could happen now would be the time to have that conversation. Do you think that you could move the organization, do you think you're in a place where you could do that, to be part of us coming to join you and me coming to work with you? I think that's the conversation, you have to have any kind of run that cycle and you find out, okay, who's actually in this game. And that could take a few weeks, month. And then once you have a few of them, you try to line up that process, you want to discover buy, this is just like enterprise selling.

Brett Berson  

Yeah, that's what I was going to ask you about. I think a lot of people that don't do sales regularly don't understand how much of it is an act of discovery. And I was curious, maybe how those ideas translates to this early part of the m&a process?

Daniel Debow  

Yes, yes. I was about to say like, you talk to your champion, hopefully the person you've built trust with an executive and you say, look, I want to learn about what happens next. And you just ask, who has to make this decision? Like? Does it have to go to the CEO? Does it have to go to the board? What is the m&a team's role? Who else do you think would be a key stakeholder to be part of this? How long does it take? What kind of diligence do you think you'd want to know? So that's first part, second part is like a sales process that you were selling, like, if you do enterprise selling, you've got to have all your ducks in your demos, and you've sort of done it before, you don't want to be making up the night before. I think on the side of the founder, you want to have a small team internally, like two or three people, Max generally, because you don't want to distract everybody else from like, Oh, my God, we're doing the sales process, that is not a good thing, you do not want to be in that. So you get that small team together, and you gather all the materials, and you prepare, you have everything so that if they say, Okay, we got your meeting, come in and give you a demo, open up your data room. Like I think there's a lot of work you can do to demonstrate the professionalism and the reality of your process versus it'll take us a month to get the data room together. And then we'll give it to you like nothing says, this is a real thing than having a data room, establish the share the link and team can start doing their evaluations all the way through it. So I think once you've had that conversation, you've done the discovery, have yourself ready, be effective at communicating it. And it's okay to sort of like nudge towards a deadline, my goal is trying to have this done by x. That's what we're trying to aim for. And you should tell people that because then people get motivated around if you don't put a deadline. Remember, there's lots of other people who are trying to sell their companies to the same place, the cork dev team is busy, they're probably doing another big transaction. And so you want to make it easy for them to do this. You don't want to make it difficult by having everything ready. And by having a timeline being upfront, I think that's a really effective way to kind of move things along.

Brett Berson  

If someone hasn't done this before, what are clear, buying signs like that this company is actually a likely acquire versus tire kicking or foe interest or whatever you might call it.

Daniel Debow  

Yeah. Well, one of them's we alluded to is executive access, and the most being the CEO, when they're setting up a meeting for you to go have lunch or have dinner with the CEO of a company. They're very interested, I think, the CEOs, I know tend to be very busy people, you don't get on the calendar. And they're certainly not doing that to tire care. I think another one would be just the time that you get with executives, and the quality of how deep they're going around what could possibly be there. And also, a third would be a conversation about like, what do you want founder? Where do you want to spend the next period? What do you want to work? How would you envision yourself? And like, you should be ready for those questions like, I don't know, I'll see what I would do. Maybe I would work here. Maybe I wouldn't. That's not a good one. It's like, I really want to work on this problem for the next three years. I'm really excited about what we could do. Here's why the company that you have would add value. Here's my demo of what I think it would look like. You want to kind of have answers for those questions, I think. But the buying signals are like when they're asking those things, specific questions about your cap table, who your investors are, what is your revenue, people often get scared by those questions. But I'm like that's a sign that they're probably serious about what they're looking for here.

Brett Berson  

How do you think about getting to price? Or ever mentioning price or forcing them to figure out price or actual numbers?

Daniel Debow  

I mean, yeah, look, everyone was always worried about anchoring and things like that, there is a number that you can always talk about, which is a great starting point. And it's not anchoring, which is like this is what we did our last round. And this is how much the company was valued at before. And by the way, what you also want to do to your point about tire kickers is use that as a qualification relatively early on. And so you say like, this is what the company was valued, like, and there's two very different scenarios, right? There's the scenario, we are actually growing, we can sustain the valuation we had, this is a business that could go raise more money. And then there's the other case where it's like, probably can't go raise more money, you're definitely going to be below that valuation. In that case, what you want to talk about is like this is how much cash has been put into the business, which is really saying, here's how much cash you'd have to pay back to pay back my investors, which is often the number around where people are thinking, and just the dynamic to understand and I don't think I'm telling tales at a school here is that like, when it's an apple hire or situation like that, in fact, it's any situation like the company doesn't necessarily want to pay your investors. They mostly want to give the money to the founders. Correct, which is a whole interesting dynamic. Yeah, yeah. Yeah. This is really important to understand. And I think by the way, That's a really important point to be very transparent with your investors with. And again, because I'll keep saying this, it's a repeat game. I've been part of doing this a few times. And then the scene has happened where like I was involved in a deal where we sold it, everyone was sort of okay. And then wow, to hate filled phone calls from other investors saying, Did you hear what this guy did and what the package they took, they literally siphoned mineral people want to sue you when that happens, because it's like allocation of consideration for the company goes immediately to the founder. Now, some of that happens normally, because everyone understands that they're buying the founder, they need to keep them around, there has to be retention. But I think it's well worth it to be transparent about that all the way through the process. I think I got a bit off track from your question. No, no,

Brett Berson  

I think that's a very important and very nuanced dynamic, because the acquirer wants to give as little consideration to the cap table as possible, assuming it's some more aqua hire sub 10s of millions of dollar price. And there's all sorts of shenanigans that end up happening because of that, I think,

Daniel Debow  

yeah, sorry, your question was really about price. So I think those two are good anchor points are like, here's the price. And you can say, Do you think that you would be able to exceed this price? You're not asking them that you're anchoring on them? You're like, obviously, to sell the business. If you're growing business, you have evaluation, you're like, well, we want to sell for significantly more than what we did our last round at. And before we spend a heck of a lot of time. If we were amazing, and you loved us, and we can show you why it made sense. Do you think your company could get there in some m&a teams? They should be able to say yeah, no, there's no way that we would do that, sorry, let's not waste your time in ours. That's the other thing is like the people is I do not want to waste time, like the tire kicking idea is less real than I think people give credit to. People are busy, they don't want to waste time on a deal that like at the end, they're like, oh, there's total disconnect between what was possible and what was not possible. At some point, yeah, pick your number, what's the number that you think is reasonable? What's the number that would make you happy, your investors happy? Just say, this is what it is, this is what I think what it would take to get a deal done. Do you think you can get there? And they're gonna come back and say, No, that's totally impossible. And you say, okay, then it's like, probably beyond the ambit of this conversation, which is like, how do you negotiate in that round, but I don't think people should be so scared about this is the number of here's why is what we think it would take clear. And you are way, way, way better to have that conversation. After you have articulated and created credibility, over time, that there are multiple people who would want to buy this company at price. That is the main thing that you have, which is the belief by the buyer, or the executive that if they don't hit that bid, someone else will and you will go in. So that's really incredibly important all the way through the most important thing, from that price perspective is to create and mostly created through reality. Bluffing is hard is what I'm trying to say. But create perception bait grand into reality that there is an alternate, bitter always. And that creates the competitive tension that gets you to a price. That's fair. I also say another thing, one of my mentors is a billionaire investor. And he had this great line, he said, don't be too tough, and don't be too smart. And it's a really good line about negotiating, which is like, don't try and optimize for the last dollar. Something you

Brett Berson  

mentioned, when we started to talk about the process, was it that you want to talk to the most likely acquire first, or the acquire that you are most interested in having acquire your business?

Daniel Debow  

Yeah, good question. First of all, this is all rules of thumb, like it doesn't always work out this way. You kind of gotta roll and then adapt and be entrepreneurial. That's where you are as a founder as these things happen. But, you know, if you could set up a perfect scenario, you'd have like four or five potential bidders, there's one who is like the one that you know, desperately wants you and has all sorts of reasons they want to be there. And maybe that's aligned with the one that you want to be at. That's the best situation. But maybe it's not the one you really want to be at, but it's okay. So you probably want to talk to them first, and get that process being credible. So that when you turn to call the one that you really want to be at that's interested, you can say, look, there is a process it is for real, it's gonna happen, here's what's going to happen. Would you be open to having that conversation with us. And this is the key point, you want to be really credible that that's happening. And if you've got bitter number one who's not really where you want to be, but they're willing to pay up, you might get them to the bitter number two, who might not pay as much, but you're like, that's okay, that's good for everybody. And it's gonna be way better for the team way better for me. I'm okay going for the lower number that you go to them after you've already established that first point of interest, because now you have late credibility that is helpful. And of course, look, maybe others are way better poker players than me. I just think that that is a very hard bluff to keep up over a multi week or month process.

Brett Berson  

Yeah. And Bill Gurley used to have this line. It's the dark arts. He uses it in a fundraising context. I think it works in m&a where a very small number have humans can pull off the dark arts. But if you are not one of them, and you are playing with the dark arts, it will blow up your entire thing entirely.

Daniel Debow  

That is a great it builds a smart guy that has a really good metaphor. Yeah,

Brett Berson  

I think it works in fundraising as well, right? The classic example is telling an investor, you have a term sheet when you don't, in a vast majority of cases, that will create a catastrophic situation in the process. But if you're the master of dark arts, you may be able to pull it off, but you better be damn sure that you are you touched on a couple of these things that I would put on in the do not do list. And I'm curious, is there anything else you'd put there for first time, founders who are thinking about m&a, like an example in if you're raising venture capital is like do not do is tell, in almost all cases, tell the investor, the other investors you're talking to and where they are in the process. You want to allude to it? Well, it's all the other folks that you would imagine I will be talking to, but it's a very, very bad idea to tell them specific names or partners. That's kind of like an obvious example. But are there other things to be really careful of if you've never done this sort of put it in the do not do bucket?

Daniel Debow  

Obviously, that one is a really important one. Another one is like, Don't bullshit easy numbers, easy things. There's just such a tendency, again, to like, hype and sell. But you're gonna get caught up. You said this in your first meeting. It's not that number. Now, what's going on? What happened in again? These are people trying to evaluate, do we trust you? Do we trust you to come work here for three years or two years to help us build this new business and solve this problem? And I think the other thing to understand is that like, very often, the people who are saying yes, we should buy this company are betting either their entire or some of their career on you. Appreciate that, appreciate that. They are betting if it goes kablooey if as you said, the dark guards blow up and blowing up in their face, too. So these people are going to really be trying to figure out, are you bullshit or not? And you just don't want to do that. And it's easy stuff. You just don't have to do it. You don't there's no need to, they're gonna find it out anyways, why not just be straight up front? The other part I put on that as being like too cute with like, the definitions of your numbers or like your performance or your retention? Oh, yeah, we definitely did this way. But no one does it that way. And it made it look 20% better or 30%? Better. Why would you do that? I'll tell you do not do one that sort of, maybe not in the same way that you were thinking about it. Do not think the deal is over? Just because they said no. Or just because they walked away? Yeah, another great mentor of mine said all great deals are lost before they're one. And like that happened to fall apart? Or someone says no, that might be the moment when you have to rally. So you really can't give up on this journey. You have to be quite relentless as you're going through it. Don't give up.

Brett Berson  

Something you just touched on any rules of thumb on when to get specific about any numbers in the business share cap table? Is there a certain amount of seriousness or pre qual you want to be doing where maybe it's a judgment call?

Daniel Debow  

Like I said, I think the test is how much time are you getting in front of the business decision makers. And if you can't get any of that, it's really hard to share. Having said that, though, there's another flip side, which is like, being so opaque upfront, is not helpful, right? Like, what is your revenue? How many employees do you have? What's your cap table? What was your last rent? These are basic, fair questions for someone to ask because they're trying to assess should we spend time on you? Why would you hesitate, just tell them if you especially if you're like we are in the process, we want to do it, it's a very clear sign you're like this is for real, here's what it is, you're not going to like fool them into by put it that way. Like they're gonna find out what your revenue is, they're gonna find out what your losses are, they're gonna find out how many employees you have at some point. And if you think that there's some dark thing in there that like, would them change their mind, you don't want to waste time on them, like any good salesperson will tell you like half the art is to just call out all the knows early so that you spend the times on the potential Yes, it's, I think this is a temptation, because you're thinking, Oh, I've got to have like six balls in the air to make this real, competitive, dynamic, not really to is fine. Three is better. But like, you don't need nine companies that are bidding for you. I mean, that happens, God bless you, but but like, call out the ones who are not real and then focus in on the few real credible opportunities is much better.

Brett Berson  

So as we get into the last couple topics, any other rituals or strategies that would be useful for founders to keep in mind? One sort of example actually, that came to mind for me that overlaps with something you were sharing earlier, as one of our founders a number of years ago was kind of mid flight in a transaction and one of the normal things you know, if you're a 50, or 60 person company, is the acquirer depending on the amount may want to interview all or a portion of your team. And one of things I was just so impressed with is he took a day with the company and rehearse the entire thing every day Few question they could think of when the person comes into the office like restage the entire thing, and help script and develop people's answers and create alignment in the company. As always, it was just like done in a level of painstaking detail that I've never seen before. And so I was curious in sort of that spirit, are there other things that might be useful for a founder to have in their tool belt that they might not know that you might be able to share with them?

Daniel Debow  

So I mean, I don't know if I've ever answered but like to expand on your point. Yes, the practice, please, with your teams before you go down. I think the other thing is keep the circle small, at first, like really, really small. I mean, when we were selling work brain I was at of Corp, Dev and marketing. And frankly, we had gone through some processes and expanded the pool. And it really threw everyone for a loop. We were public company, right. And the time that we went through it the last time he was literally just like me and the CEO up until we had to bring in the CFO to bring in the CEO. And people were a little bit like egos were hurt. But it was like important to keep it very focused in the small group so that everyone else focused on like the most important thing, which is running the business and not being distracted, because this is a very distracting thing. Okay, everybody gets a little weird. So I think your point brings up a really important point, which is like there are one way doors, there are two way doors, like once you tell everyone that there's a sales process, and everyone has to go for an interview, all bets are off, that definitely changes things in the company. So you got to be really cautious and confident before you go through that, that this is the right thing the right place. Having said that is very reasonable, especially in an apple hire for people to want to interview the folks that they're going through, or at least a sample of those folks. So they get a sense of the quality of the talent depends on the number of how many people think I alluded to one before, which is, it's much better for you via acquiree, to articulate the vision of how your products will work with the acquirer do the demo, do the workout, show it being integrated, show how it already works together, like that is making everybody's job easier. And it really shows that you're excited and interested in being part of this acquirement it makes a big difference. Not everybody does it, it sounds so easy, right? Like just mock it up, I think is a really good practice. I think you're right on the interviews actually know, my co founder, r&r. He was telling me about an acquisition process that he had gone through, and one of his prior companies and they literally had school because they knew that the top 10 people were going to have to be very detailed technical interviews. And like every day after work, they all came in, and they drilled and practiced on the technical interviews so that they would eat, I think that is a really great idea. I'll give you another practice that I think was really helpful for us, which is just like an enterprise sales map out who you know, who is influential, and has relationships at that company that you know, is there a person on the board of the company that's acquiring you that one of your investors know, is there an advisor, at some point, you might want to reach out and say like, Hey, look, confidentially, we're thinking to get acquired by XYZ company. I know, you know, the CEO, I don't ask for a lot. But I would really appreciate if you let them know that, hey, we're excited and be like, tell them what you think about us. That makes a huge difference in the process. If you can get a board member or an investor or someone in the circle of trust, who can vouch for you. Really, really crucial, I think makes a big difference in the likelihood of the trust level going up of like, why should we take a bet on this group?

Brett Berson  

You just touched on this, but any thoughts on messaging, either to the inner circle as you're thinking about this, or to the broader team and any do's and don'ts before we talk and wrap up on post acquisition success? You want

Daniel Debow  

to be like, Hey, we're at this point, you want to be transparent about why and what's going to happen? What you need to understand is the second you say we are selling the company, someone told me this one, everyone listens to one radio station, wi I fm, what's in it for me? Yep.

Brett Berson  

In almost all things, doing a riff someone leaving, everyone is thinking, what does it mean for me?

Daniel Debow  

What does it mean for me, and so you, the founder are super excited, you're like, Oh, I'm working on this for eight years, and like, we're gonna make some money in my dreams come true, or the pain stops or whatever it is. But they're just thinking about what happens to my equity, what's gonna happen to my job? Am I gonna get fired? These are real concerns. And so I think you have to lead with some serious empathy. When that occurs, let me answer your questions. You have to have the time to like, go through that at first, positively. You can't just be a cheerleader. You're like, Hey, this is what I think is gonna happen. Here's why. And I think you want to come prepared for those kinds of questions. Don't show up and say, Yay, we're doing this m&a transaction, and you're all gonna go get interviewed. And then people's hands shoot up and they say, Well, what does that mean? Are we stopping the product? Should we keep working on this, but I'm Smith shares, what price is that? And you're like, Well, let me get back to you. That is a bad scenario. You want people to walk into that meeting, saying, My leader cares about me. This is a good thing for me. I might be a little anxious, but you know, they're doing the best they can answer it. And I'm going to have some agency and control over my life over what's going to happen next, which is really important thing for people to have.

Brett Berson  

Is there anything you should do when you're talking about the broader team? It seems like you're again rule of thumb there's exceptions to all of this is to wait until you Have a lot of confidence a deal is coming together because of the Thrash that it can create. But there's also the nature of any m&a until it's done, it's not done. And deals fall apart all the time is that need to be a part of the way when you're bringing the broader team into this, that you need to articulate that in some way. Because there is a 2% 5% 30% chance of the whole thing blows up

Daniel Debow  

100%. And that's kind of what I was trying to get at is like, it is better to be honest about this, I think, than to try and pitch and spin and sell everybody on this thing. Because if it doesn't work out, you've lost all the credibility. And now you're left with the team was like this person's liar. You didn't say any of this stuff. You said it was a done deal. This is a motion of trust, where you're like, look, I bring you in, but here's what's going to happen, here's what I think is gonna happen. Here's what could happen. And you kind of keep people updated on that process as it's happening as it's going through. And like I shouldn't say, I didn't always get all this right.

Brett Berson  

We're getting to benefit from all of your screw ups in the past, you know,

Daniel Debow  

oh, I've screwed this up. I'm sure some of my former teammates are like, Well, you didn't do that? No, I know, I know, I know, I've made a mistake and done it differently.

Brett Berson  

But now everyone can benefit. I guess just as we wrap up here, what about any big ideas or things to keep in mind on the other side of an m&a transaction. And maybe we can kind of go in two directions, any thoughts you have on when there's a strategic product that is going to live on? And maybe any thoughts you have when maybe it's more of a talent oriented acquisition, about maybe how to make the first week or month or quarter successful or just set you and your team up for a lot of success on the other side?

Daniel Debow  

Yeah, that's a whole podcast and of itself, but I'll try and think of a few thoughts. So I think the key thing to keep in mind is you are going to be there for a while, and you are not the CEO anymore. You're an employee, you work there. And that is a hard transition. Like I think psychologically, you should prepare yourself for some psychological turmoil going from like founder, you asked earlier, what's it like to be a big company versus a founder Well, like you transition, and that is a mindset shift that you have to move into, where you want to keep your amazing founder Enos and your ownership culture and the drive and hustle. But you also have to recognize that you are now operating in a different environment where you can't just constrain you have other stakeholders, you have other peers, you have people who you work for who are above you. And that's really important. I think that thing for you to do as a founder is find other founder peers inside the company quickly find other executives, you can trust and talk to people outside the company. Just on this topic alone. I've had probably four calls in the past six months of people who've been acquired, they're like, how do I survive here? What's going on, it's so different. So it is disorienting, and don't think you're weird, or something's wrong with you. It's like it is a psychological change. I mean, just frankly, just the tension release after going through the journey of being a founder, which is hard. And then like you did it, you made it to the side, like just that alone is disorienting. So to actually suggest, if you can take some time off, give yourself a break, your family probably wants you to be around your friends for a little bit of time and most of the companies acquire, you probably will understand that. I think the number one thing you want to do is build trust with people around you. This is definitely something I messed up. No question about multiple. Though, if I had to do it again, I would learn like you come in and you keep your mouth shut. It is really annoying for people inside of a big company when smarty pants startup person, and let's be honest, right? Most people know that you probably made a ton of money. In some cases, you may have made more money than they're gonna make in their career. And you might be junior to them. But you're still there. And so like that is a thing. You got to be aware of it. And so leading with humility, asking questions, but not being a smartass. Like you guys are idiots, why do you do this like that is not going to make you friends asking questions when you seek to understand and try to understand why did you make this choice? How does this place work, you have to get pretty good at organizational dynamics and understanding that I think another thing that's helpful is to try and focus on the team and making sure that the first 90 days are like effective and successful, you're caring for your people, you're looking out for them, you're making sure that they're clarified. One thing that is important, though, is that you don't roll over when you get there. And this happened to me as well, where like you show up at big fancy company that you've admired for a long time, and you're like, Well, clearly everyone there, it knows exactly what to do with our product and how to distribute it and what to do. So I'm just going to follow what they tell us, that's actually the best at it. There's a reason you got acquired and it doesn't mean that you have to go make enemies, but it also doesn't mean you have to do everything that the machine tells you to do. If you just roll over with everything that the big company tells you, you might make mistakes that are not helpful and you know, it's okay to assert yourself a little bit around that. I think the other one is to not go too broad, stay focused on like achieving a very focused outcome for your integration of what you need to do. And then the last one is if you can, I mean this is very situational, but like try to avoid the wholesale replac forming and rebuilding of your company. In related to that try to maintain some sense of of ability to strike your own deals and move things along. Like sometimes you get into a bigger company. And they're like, Well, this is how we do customer contract, this is how we sell it, you can't do it our way. And that might really slow your momentum. And so if you find things like that, you want to go to your sponsor and say, Look, I know that this is not the standard that we do at big company, but like, this thing is going to kill the goose that you just bought. So can you please make sure that that doesn't get messed up. The first one is the most important that you are no longer your founder, but you're not the CEO, you are an employee, you're an executive. And that's a different skill set. Actually, I believe with this. I think most founders that I know, who are really good founders are learners, they learn they like are constantly trying to figure out the universe. And they're humbled and know that they don't understand what's going on in their business and their product, whatever it is, don't stop being that when you come into a big company, because it's easy to come in and be like, this is just it, I have to do my prison sentence. And then I'm free, I can go do my own thing. That's a terrible way to spend your time and your life. Because believe it or not, there is a lot that you can learn by being an executive inside of a large organization. Even if you fully intend to go off as soon as your earnout is done to start another startup, you will be a way better founder. If you really understand the dynamics of what happens in a large organization, how they sell how they go to market, how the products work. Also, if you're lucky, what that CEO who probably is a founder that inspired you, what do they think? What can you learn from them? A lot, definitely learned an enormous amount from Harley and Toby and the other executives here at shop fight, those lessons are valuable. So give yourself the space to be positive about it. Like there's going to be a period of mourning of like, it's almost like something died because our identity gets wrapped up in our company. But don't mourn forever. Embrace your new identity, have fun in it. It's gonna make your journey just so much better if you have that learner's mindset and humility to know that you can learn a lot from these folks. And if you can figure out how to do the magic that you sort of talked about earlier, which is like how do you grow something inside these large organizations, then that's really fun. That's pretty awesome.

Brett Berson  

Great place to end. Thank you so much, Daniel for spending this time with us.

Daniel Debow  

My pleasure. I hope it was helpful. And I'm D to bow on Twitter dde Bo w i love actually engaging with founders so people want to follow me and DM me and DMS are open. I'm happy to follow up if I can.

Brett Berson  

Awesome. Thank you. Thank you. This was great. No problem.