In/Organic Podcast

SummaryIn this episode of the Inorganic Podcast, hosts Christian Hassold and guest Erik Morton delve into the planned acquisition of Brightcove by Bending Spoons. They explore the dynamics of the deal, the market context, and the implications for both companies. Brightcove, a pioneer in online video hosting, faced challenges in a competitive landscape that evolved substantially due to digital video creation and storage innovation, notably the free models offered by YouTube and Vimeo. Christian and Erik discuss Bending Spoons' pattern of being an acquirer of distressed businesses and how they typically run the businesses post-acquisition to maximize return on investment. This episode is an interesting look at how tech “Zombies” find a home through strategic acquisition when operating standalone is not a credible option.TakeawaysThe acquisition of Brightcove by Bending Spoons is part of a broader roll-up strategy that has been executed multiple times prior.Bending Spoons has been particularly interested in notable companies that became distressed due to commoditization or lack of differentiation, yet still had loyal enterprise or SMB customer bases.The acquisition price reflects Brightcove's current market challenges and growth.Public companies face immense pressure to grow, leading to take-private transactions when they cannot without making drastic changes that public markets don’t appreciate.The concept of 'zombie' companies is relevant in today's market, highlighting the impact of stagnation on management and employees.We will see more transactions like these as Zombie companies both public and private face growth challenges.Chapter Markers0:00 Introduction2:52 Background on Brightcove5:15 Background on Bending Spoons07:18 Insights on the Deal Valuation11:37 Brightcove's Engineering Costs & Financial Health14:48 Anticipating Radical Changes Post-Acquisition21:46 Investor Returns and Employee Compensation28:25 Takeaways 32:12 ConclusionConnect with Christian & In/organic PodcastChristian's LinkedIn: https://www.linkedin.com/in/hassold/In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcastIn/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featuredConnect with E20 guest, Erik Morton on LinkedInhttps://www.linkedin.com/in/erikimorton/

SummaryIn this episode of the Inorganic Podcast, host Christian Hassold delves into a case study on the startup Crisp (gocrisp.com), which has successfully executed four acquisitions over the last 2 years. The discussion covers the company's background, the leadership dynamics, and the strategic rationale behind its inorganic investments. The episode serves as a case study to demonstrate what good M&A looks like in an early to mid stage SaaS company and what features of M&A targets companies should be thinking about at that stage. As a part of the discussion, Christian dives into some of the deal specifics and the economic benefits to Crisp based on opinion and publicly accessible information.Takeaways- M&A could be as effective as traditional sales, marketing, and product investments.- What problem is Crisp solving and why is it important- Background on Crisps substantial financing and debt rounds- What kinds of M&A has Crisp executed and why- How the deals Crisp has executed have likely helped fuel their growth- What can other startups learn from Crisp's approach to M&A- Order of the kinds of deals a company might do is a consideration in building the M&A muscle in an early to mid-stage SaaS company- The startup ecosystem often underestimates the value of M&A Chapter Markers0:00 Introduction03:19 The Case for M&A in Early Stage Startups05:14 Crisp's Company Profile08:28 Pre-conditions for M&A in Early Stage Startups13:37 Breakdown of Crisp's Four Acquisitions20:37 Crisp's Acquisition Strategy22:01 Financial Case for Crisp’s M&A24:28 Analyzing the Order of Crisp's Deals26:37 Reflecting on Crisp's Strategy28:10 ConclusionConnect with Christian & In/organic PodcastChristian's LinkedIn: https://www.linkedin.com/in/hassold/In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcastIn/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featuredEpisode References:https://www.linkedin.com/in/aretraasdahl/https://finance.yahoo.com/news/crisp-raises-50m-series-b-140500449.html?utm_source=chatgpt.comhttps://www.sec.gov/edgar/search/#/ciks=0001818100&entityName=Crisp%252C%2520Inc.%2520(CIK%25200001818100)chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://ir.youradv.com/static-files/d47814ee-084c-4c53-9b0f-9a9753f9e9cfEpisode Outline

SummaryIn this episode of the Inorganic Podcast, host Christian Hassled discusses the acquisition of Command AI by Amplitude Software. The conversation delves into the deal's details, including the financial aspects, the rationale behind the acquisition, and the implications for both companies. Christian highlights the challenges faced by early-stage startups in the current economic climate and the strategic decisions that founders must make to exit now or continue burning cash not knowing if the fundraising market will the there for them when they need it. The episode concludes with key learnings from the transaction, emphasizing the importance of founders making the tough decision to sell even when they have a credible product and plenty of runway to keep going.TakeawaysAmplitude acquired Command AI for $45M, $20M net of cashAmplitude is a public company with a market cap of $1 billion, this is their 5th acquisition in 5 yearsCommand AI was an early-stage startup backed by Insight Ventures, among others. The company reports it was flush with cash and agreed to be soldThe deal reflects a smart strategic move in a tough market for SaaS companies.Command AI's technology aligns well with Amplitude's product offerings.This deal is interesting because it helps understand how public companies value venture-backed startups in the current economy.This deal also examples AI tech consolidation and the relative values for such companies.Chapter Markers00:00 Introduction01:7 Background on Command AI02:49 Introduction to Amplitude Software04:51 Deal Details and Controversy Around Price06:00 Analyzing the Deal Structure and Rationale09:35 Learnings from the Deal11:37 ConclusionConnect with Christian & In/organic PodcastChristian's LinkedIn: https://www.linkedin.com/in/hassold/In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcastIn/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featuredEpisode Referenceshttps://www.linkedin.com/in/spenserskates/ https://amplitude.com/blog/amplitude-acquires-command-aihttps://news.ycombinator.com/item?id=41849907

SummaryIn this episode of the Inorganic Podcast, Christian and Erik delve into the complexities of take private transactions, using Smartsheet's recent acquisition as a case study. They discuss the economic challenges facing public companies, the lifecycle of a business transitioning from public to private, and the strategic considerations for boards contemplating such moves. The conversation highlights the importance of fairness opinions and the intricate dynamics of investor strategies in these transactions. In this conversation, Erik and Christian delve into the complexities of take-private transactions, focusing on the negotiation dynamics, the role of advisors, regulatory considerations, the impact on employees, and the financial structuring that influences investor returns. They use the Smartsheet deal as a case study to illustrate these concepts, providing insights into the motivations behind such transactions and the implications for all parties involved.TakeawaysPublic companies face unique challenges that may lead them to consider going private.The lifecycle of a business includes transitioning from public to private ownership.Smartsheet's acquisition is a significant case study in the current market.Initiating acquisition conversations requires careful preparation and strategy. The Smartsheet deal features a go-shop provision allowing for additional bids.Advisors play a crucial role in take-private transactions, including bankers and consultants.Regulatory dynamics can complicate interactions between buyers and sellers.Employees in public companies face different equity compensation structures when taken private.Investor returns are influenced by the capital structure and debt servicing costs.The liquidity of equity compensation differs significantly between public and private companies.Chapters00:00 Introduction04:04 Understanding Take Private Transactions08:28 Analyzing the Smartsheet Case Study15:53 Transaction Dynamics and Investor Strategies20:44 How Fairness Opinion Works23:28 Initiating Acquisition Conversations29:18 Advisors in Take-Private Transactions31:48 Do's and Dont's for Potential Acquirers37:33 Impact of Take-Private Transactions on Employees45:41 Erik Morton's Hypothetical Simple Exit Waterfall51:38 ConclusionConnect with Christian & In/organic PodcastChristian's LinkedIn: https://www.linkedin.com/in/hassold/In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcastIn/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featuredConnect with E20 guest, Erik Morton on LinkedInhttps://www.linkedin.com/in/erikimorton/Episode Referenceshttps://investors.smartsheet.com/news/news-details/2024/Smartsheet-to-be-Acquired-by-Blackstone-and-Vista-Equity-Partners-for-8.4-Billion/default.aspxhttps://www.wsj.com/articles/smartsheet-to-be-taken-private-by-pe-firms-in-8-4-billion-deal-7296758c

SummaryIn this episode of the In/organic Podcast, host Christian Hassold and guest Keith Anderson delve into the evolving landscape of data measurement, focusing on WPP's potential divestment of Kantar. They discuss the implications of this move, the importance of independent measurement in advertising, and the future of Kantar in the market. The conversation also touches on the challenges agencies face in adapting to a rapidly changing media environment and the need for collaboration and innovation within the industry.TakeawaysWPP is exploring the sale of its stake in Kantar to streamlines its business and bring more cash onto their balance sheetKantar is known for its consumer panel businesses and global footprint, WPP currently owns 40%, Bain Capital owns 60%.Independent measurement is crucial for advertisers but the capabilities on a standalone basis are becoming commodifiedThe agency business is facing significant challenges, global agencies must elevate their offerings to remain competitive in a world where clients are seeking to consolidate spend with a single global partnerChapters00:00 Introduction05:23 Understanding WPP and Kantar's Relationship09:22 WPP's Strategic Reasons for Acquiring Kantar12:46 Independent Measurement in Performance Marketing16:47 Bain's Potential Divestment of Kantar20:45 Analyzing WPP's Tech Strategy & CTO vs CPO23:54 Kantar's Potential Acquirers28:12 Agency Evolution and Collaboration in a Changing Market35:04 ConclusionConnect with Christian & In/organic PodcastChristian's LinkedIn: https://www.linkedin.com/in/hassold/In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcastIn/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featuredConnect with E19 guest, Keith Anderson on LinkedInhttps://www.linkedin.com/in/keithanderson101/Episode ReferencesWPP FGS Divestment Announcement: https://www.wpp.com/en/news/2024/08/wpp-to-sell-its-majority-stake-in-fgs-globalReuters divestment press: https://www.reuters.com/business/wpp-is-considering-sale-stake-bains-kantar-source-2024-01-10/

SummaryIn this episode of the In/Organic Podcast, host Christian Hassold explains the “why” behind MasterCard's $2.6 billion acquisition of Recorded Future. Christian’s breakdown of the acquisition story explains Recorded Future’s role in cybersecurity, national security, and how the CIA venture arm, In-Q-Tel landed on their cap table. The discussion includes context on the origins of Recorded Future, its unusually limited capital requirements, and how Recorded Future has likely out performed many other companies that achieved near billion-dollar valuations over the past five years.TakeawaysMasterCard acquired Recorded Future for $2.65 billion.Recorded Future is a significant player in cybersecurity.The CIA's investment highlights the strategic importance of Recorded Future.Cybercrime poses a $9 trillion threat globally.Recorded Future provides intelligence for both businesses and governments.Recorded Future's growth rate was impressive at 25% CAGR.The deal represents a 7.8x revenue multiple, indicating strong market confidence.Chapters00:00 Introduction02:43 Overview of Mastercard's Acquisition of Recorded Future03:20 Analyzing Mastercard's Acquisition Strategy03:56 Use Case: Credit Card & Fraud Transactions07:31 Use Case: Protecting & Defending Assets10:02 What Is Recorded Future?12:33 In-Q-Tel and CIA's Involvement18:22 What’s Next for Recorded Future?18:58 ConclusionConnect with Christian & In/organic PodcastChristian's LinkedIn: https://www.linkedin.com/in/hassold/In/organic on LinkedIn: https://www.linkedin.com/company/inorganic-podcastIn/organic on YouTube: https://www.youtube.com/@InorganicPodcast/featuredEpisode Referenceshttps://www.mastercard.com/news/press/2024/september/mastercard-invests-in-continued-defense-of-global-digital-economy-with-acquisition-of-recorded-future/https://b2b.mastercard.com/news-and-insights/blog/ecommerce-fraud-trends-and-statistics-merchants-need-to-know-in-2024/https://www.theinformation.com/briefings/insight-sells-cyber-firm-to-mastercard-for-2-65-billionhttps://www.statista.com/forecasts/1280009/cost-cybercrime-worldwide