Large companies rarely make cold acquisition offers. The typical path is a gradual process starting with a partnership or a small investment. This allows the acquirer to conduct due diligence from the inside, understand the startup's value, and build relationships before escalating to a full buyout.

When establishing a new M&A function, the initial challenge is operational readiness. Booz Allen's Corp Dev leader forced functional teams to engage in direct conversations with targets, moving away from passive trackers to build diligence competency and cultural acceptance.

Contrary to common buy-side tactics, Booz Allen advises unrepresented founders to hire investment bankers, even in proprietary processes. They find that bankers professionalize diligence, manage seller emotions, and accelerate the timeline, making the deal smoother for both sides.

Rather than just submitting a bid, smart buyers proactively call the investment banker beforehand to frame their offer. This "working the refs" strategy helps manage the banker's expectations, gather intelligence, and avoid being dismissed, even if the initial bid is not the highest.

For proactive deal sourcing, the initial contact is a high-stakes sales call. F5's Andy Cohen invests 2-10 hours researching a target before the first outreach. This deep dive into podcasts, blog posts, and mutual connections enables a substantive, flattering conversation that builds immediate rapport and credibility.

The company's M&A philosophy prioritizes acquiring companies they have previously partnered with. This approach provides deep pre-diligence insights into capabilities, culture, and strategic fit, significantly de-risking the acquisition and strengthening the business case for the deal.

When a potential acquirer calls, the founder's default mode should be information gathering, not pitching. By asking strategic questions ("Who else are you talking to?", "What are your goals?"), founders can extract valuable competitive intelligence about the market and the larger company’s plans, regardless of whether a deal happens.

In today's crowded market, the key PE differentiator is no longer financial engineering but the ability to identify and cultivate relationships with target companies months or years before a sale process. This provides the necessary time for deep diligence and strategic planning.

Assessing cultural fit can't be done in a formal, time-crunched diligence process. Snowflake approaches M&A like dating, building relationships with companies over time. This long-term engagement allows for genuine discovery of values and operational style, de-risking the 'cultural diligence' aspect of a potential acquisition.