Special: An Acquirer’s View into M&A with Taylor Barada, head of Corp Dev at Adobe

A special episode breaking the show's mould — no single deal covered, but a conversation with Taylor Barada, VP and head of Corp Dev, Corp Strategy & Strategic Partnerships at Adobe. Background: he joined Adobe in 2013; before that, VP of Business at Zynga, and before that — relevant to the show — Head of Corp Dev at Yahoo. JD-MBA from Northwestern, a couple of years at Bain, and — perhaps most interestingly — the show's first former professional athlete: Taylor played professional football in England. Looking back, he didn't have the language at the time, but with no real US scene out of college, "I effectively became an independent solo soccer entrepreneur" — inserting himself into the European game. An amazing life experience, though not always easy.

The episode sticks to the show's structure — using it as a vehicle for Taylor's inside view. First: how do conversations typically start between Corp Dev and startups? Taylor finds the question interesting because it's not something he spends a ton of time thinking about — at some point it's just natural, fluid, relationship-driven; not some big "we're for sale" moment, though those happen. It can seem like a dark black art; when it feels that way, entrepreneurs pull back and stay reserved because they're unsure what they can say — totally fair.

What he's always done as a deal lead — and the culture he tries to create on the group — is remembering the process is fluid: hard to know which conversations go the distance. The Valley is incredibly small, so it's very relationship-oriented, and conversations often start literally as a connection: "Hey, you guys are in this space; this company is doing interesting things; you should get to know each other." He loves Mark Suster's blog post on investing in lines, not dots: with one point in time you can't decide, but with connections over time — seeing people say what they'll do and then (hopefully) do it or better — credibility develops, and you have time to process how it fits.

There absolutely is the other ~20% case: a company that wasn't being tracked gets stereotypical strategic interest from someone else and decides to talk — to sell to Adobe, or to the highest bidder. They take those calls and sometimes do those deals, but it's a high bar; they try hard to develop relationships so the 80% is strategy- and relationship-driven with broader context developed over a long period.

Ben asks about the incentive for the entrepreneur to start the conversation. Taylor's context: you can waste an enormous amount of time running around the Valley talking to all the big companies — that's not your job; your job is to build value for customers, and at some point you'll monetize it via IPO or sale. He's had introductions where the entrepreneur told the VC on his board: "Why would I even take that meeting? I'm not trying to sell the company." He finds that humorous — the old saying "when you want money, ask for advice; when you want advice, ask for money." If your first interaction is asking to be sold, it puts an awful lot of weight on that interaction, and it doesn't need to be that way.

The point it ignores: as a smart seller you'll have a fiduciary duty to get the highest value when the time comes — that just is. But once the deal takes place, you and the team will be working there: is it a place where your vision can not just get parked but hopefully be accelerated? It's not an end as much as a beginning. Are they the type of people you want to work with? Do they see the world the same way? Those things get sus'd out by getting to know people over time — due diligence on the acquirer. Best when explicitly not around a specific transaction. Partnerships with big companies are certainly fine but can be colossal wastes of time: every small company thinks every big company is the keys to the kingdom, but partnerships take a very long time to get done and to mature, and the truly game-changing ones are few and far between. Be pragmatic about expectations.

Adobe can act as a concierge into the wildly complex 15,000-person company — they know how to navigate it, whereas from the outside it's extremely hard to figure out who to reach. But best of all is the open-ended: "Hey, we're in this space. We'd love to meet. Not looking for funding, not looking to sell — would love to grab coffee and just talk about what we're doing."

David marvels at how much this mirrors raising venture capital — an education for him. They coach their companies: you're always racing. You're not always closing, but you're always racing, because relationships take time; VC investors, per the Suster post, need to invest in lines, not dots. Occasionally there's a dot so compelling you have to invest — or for Adobe, have to buy — but it takes time to build relationships.