Episode 27: Special—A Conversation with Microsoft's Head of Strategic Investments Brian Schultz

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Dec 16, 2016

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INSIGHT

Microsoft's Acquisition Process

Microsoft's corporate development team manages balance sheet activities like acquisitions and investments.
Target companies are typically identified by business groups due to their product roadmap knowledge.

ANECDOTE

Microsoft invested in Facebook in 2007 at a $15 billion valuation, despite public ridicule.
This investment proved successful, demonstrating the potential of strategic investments.

INSIGHT

Strategic investments are not simply an alternative to acquisitions; they serve distinct purposes.
Minority investments offer limited control, making deep strategic partnerships crucial.

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Topics covered include:

Brian’s history working across “both sides of the aisle” as both a startup founder and corporate development leader at a big company, how perspective from each informs the other, and the importance of learning “customer empathy”
How Microsoft approaches M&A from an organizational perspective, and the importance of fit with the company’s product roadmap
How Brian approaches strategic investments at Microsoft, and the evolution over time of the Microsoft (and large technology companies as a whole) perspective on investing in other companies
Balancing the tension between partnering and investing, and what criteria Brian thinks about when evaluating companies
Microsoft’s investment in Facebook in 2007 (at a then-crazy-seeming $15B valuation), and more recently Foursquare, Mesosphere, CloudFlare and others
The current state of the tech M&A landscape, and the emergence of private equity as tech company acquirers
Potentially changing corporate and foreign tax structures and how they impact acquirers’ thinking around deals (or not!)
How Microsoft tracks and evaluates success of acquisitions over time, and lessons learned from successes and failures
The increasing number of operating companies (technology and otherwise) looking to invest in startups, and how that landscape has evolved over time

Sponsors:

Followups:

Snap Inc.’s rumored IPO filing — and bonus discussion of how VC’s and other investors think about “exiting” their investments in companies that have gone public

Hot Takes:

The Carve Out:

More Acquired!

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