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.

Fairfax employs a clever M&A strategy called the "cannibal buy-up." When an asset is too large to acquire outright, they partner with another firm. Later, when financially stronger, they use their capital to buy out the partner's stake, allowing them to gain 100% control of a valuable asset over time.

When pursuing a distressed company, understand the investors' intrinsic motivations. They often prioritize avoiding a public failure and protecting their reputation with LPs over recouping sunk capital. Frame the deal as a success story for them, not a fire sale.

A successful exit is a highly choreographed dance, not an abrupt decision. Founders should spend years building relationships with line-of-business leaders—not just Corp Dev—at potential acquiring companies. The goal is to 'incept' the idea of an acquisition long before it's needed.

When investors who previously wrote off your startup try to maximize their return at the team's expense during an acquisition, use a co-founder negotiation tactic. One founder can play the 'bad cop' who is unwilling to concede on team retention terms, shielding the team's financial outcome.

To justify a high acquisition multiple, a founder must prove the business can operate without them. A powerful tactic is showing an acquirer your calendar to demonstrate that a majority of key clients are managed by the team, not the founder. This de-risks the acquisition and proves the company has true enterprise value.

Founders who wait until they need to sell have already failed. A successful exit requires a multi-year 'background process' of building relationships. The key is to engage with SVPs and business unit leaders at potential acquirers—the people who will champion the deal internally—not just the Corp Dev team who merely execute transactions.

Instead of asking P&G to acquire Spinbrush, John Osher proposed licensing the Crest name. This "ruse" gave him access to key decision-makers. When P&G agreed to the license, he strategically declined, prompting them to suggest the acquisition he wanted all along.

To achieve a high-value acquisition, biotechs must first build a credible strategy to succeed independently, creating a position of strength. Concurrently, leaders should keep multiple potential suitors proactively informed on all business aspects—not just clinical data—to facilitate a competitive bidding process when the time comes.