20VC: Why Strategic Investing Is Slow Motion M&A, Why Valuation Is The Hardest Element of M&A & What Determines Between Cash vs Stock Deals with Chad Richard, SVP of Business & Corporate Development @ Yelp
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 22 November 2017
⏱️ 27 minutes
🧾️ Download transcript
Summary
Chad Richard is the Senior Vice President of Business & Corporate Development @ Yelp, where he leads acquisition and investment activity. Yelp is one of the most active in the space having acquired both NoWait and Turnstyle Analytics, plus selling Eat24 to GrubHub for $287.5m, all in the past year. Prior to Yelp, Chad spent six years at Apple as Senior Director of Worldwide Product Marketing focused on Apple’s operating systems and internet services. Prior to Apple, he cofounded and was CEO of Simple Star, a photo and video software and services company that was acquired by Roxio. If that was not enough, Chad has also advised the likes of Flipboard, MoveWith and Curbside, just to name a few.
In Today’s Episode You Will Learn:
1.) How did Chad make his way from startup founder to leading Apple's M&A charge to today, running M&A with Yelp?
2.) What did the Apple M&A strategy look like when Chad was with the company? Why was Apple so keen to pursue a product focussed M&A strategy? What were Chad's big learnings from that experience with Apple?
3.) How does Chad look to build potential startup pipe with Yelp? What attracts Chad to one startup over another? What does Chad wish that startup founders did and knew more about in the initial relationship building phase?
4.) Yelp also makes strategic investments, how does Chad ease founder and VC concern that a strategic investment is not an acquisition? Does a strategic investment prevent a startup from partnering with other firms? What should founders be aware of when accepting strategic investment?
5.) How does Chad analyse the compensation element? Why does Chad believe that valuing potential acquisitions is the hardest element of the process? How do acquirers determine whether to present a cash vs stock deal? What should founders consider with stock deals between private and public company stock?
Items Mentioned In Today’s Show:
Chad’s Fave Book: Disneywar
Chad’s Most Recent Investment: Turnstyle Analytics
As always you can follow Harry, The Twenty Minute VC and Chad on Twitter here!
Likewise, you can follow Harry on Snapchat here for mojito madness and all things 20VC.
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Transcript
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| 0:00.0 | You are listening to the 20 minute VC with me, Harry Stebbings, and I'm sure you will know by now you can find me on Snapchat at H. Stebbings with 2Bs. |
| 0:06.8 | It would be fantastic to see you there. I really do always love to hear your thoughts and feedback on previous shows. |
| 0:11.6 | If you haven't listened to Mondays with the phenomenal Mark Pinkus, then that really is a must, and I would love to hear your thoughts and feedback. However, to the show today, and as you know, acquisitions are a core part of our |
| 0:21.3 | ecosystem. And so joining me today, I'm thrilled to welcome an individual who heads up all |
| 0:25.4 | things acquisitions and investments for one of the big incumbents of today. Joining us in the |
| 0:29.8 | hot seat, we have Chad Richard, Senior Vice President of Business and Corporate Development at |
| 0:34.2 | Yelp, where he leads acquisition and investment activity. Yelp is one of the most |
| 0:37.7 | active in the space, having acquired both no weight and turnstile analytics, plus selling |
| 0:42.4 | E-24 to Grubhub for $287.5 million all in the past year. And prior to Yelp, Chad spent six |
| 0:49.1 | years at Apple, as senior director of worldwide product marketing, focused on Apple's operating |
| 0:53.4 | systems and internet |
| 0:54.5 | services. Prior to Apple, he co-founded and was CEO of SimpleStar, a photo and video software and services |
| 1:00.2 | company that was acquired by Roxyo. If that wasn't enough, Chad also has advised the likes of |
| 1:04.7 | Flipboard, move with, and curbside, just to name a few. I'd also have to say a huge thank you to |
| 1:09.3 | Nico Bonnatsos, the one and only at |
| 1:11.2 | General Catalyst, for the intro to Chad today, without which this episode would not have been |
| 1:15.1 | possible. But before we dive into the show today, as I've said before in past episodes, after I |
| 1:19.4 | had Josh at Raden on the show, I bought a Raden, and we've discussed some of their awesome features |
| 1:23.5 | previously, but there are also some other benefits that make it such an incredible product. It fits on every plane, my favourite for this, of course being the carry-on. It also has an |
| 1:31.8 | extremely strong, durable shell, and is super lightweight, and it comes with a free five-year |
| 1:36.3 | warranty with free shipping and returns. And for those in the US, when you purchase your |
| 1:40.1 | Raiden with the code 20 VC, that's 20 VC at checkout. You'll get a $25 of Uber |
... |
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