When establishing a new M&A function, the primary challenge is getting senior leaders to move beyond broad statements and make concrete strategic choices about which opportunities to actively ignore. This focus is crucial for effective execution and prevents wasted energy on opportunistic, unfocused deals.
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Before hunting for acquisitions, the internal business owner (deal sponsor) must write a thesis answering "what problem are we solving?" This prevents reactive M&A driven by inbound opportunities and ensures strategic alignment from the start, separating the "why" from the "who."
The foundation of a new M&A function is deep internal alignment. Before looking outward, the first month should be dedicated to interviewing internal product leaders and SMEs to understand the business, product roadmap, and strategic direction from the inside out.
A stated M&A strategy is only a hypothesis. To validate it, present the leadership team with actual potential targets that fit the criteria. Their reactions will reveal their true appetite and expose any misalignment between the written strategy and their operational instincts, saving time and effort.
Many M&A teams focus solely on closing the deal, a critical execution task. The best acquirers succeed by designing a parallel process where integration planning and value creation strategies are developed simultaneously with due diligence, ensuring post-close success.
Executive time in an M&A process should not be wasted on routine status updates. The steering committee's primary purpose is to be a decision-making body. Meetings must focus exclusively on program health, escalating critical risks, and making key decisions that functional teams cannot resolve on their own.
Three dangerous mindsets, or "coats of conviction," derail M&A deals. They are: reactive positioning (chasing auctions), integration negligence (delaying planning), and the model mirage (trusting an untested financial model). A disciplined, proactive process is the antidote to these common pitfalls.
The most challenging M&A negotiation often happens internally, not with the seller. CorpDev must convince internal product and engineering leaders to abandon their own projects and commit resources to an acquisition, especially when it directly replaces an in-house effort. Gaining this buy-in is critical for success.
Don't treat your M&A strategy as a state secret. Proactively sharing a detailed deck with bankers and trusted advisors multiplies your sourcing capabilities. This transparency ensures the inbound opportunities you receive are better aligned with your strategic priorities.
After making 13 acquisitions, Deel's CEO learned that the deals that didn't work well were those approached with a 'why not?' attitude. These were often opportunistic plays on adjacent but non-core businesses. Now, he has a simple filter: if an inbound acquisition opportunity isn't an immediate and enthusiastic 'hell yeah,' he passes, avoiding the distraction and integration challenges.
A five-step framework—Deep Dive, Battle Test, Communicate, Run Funnel, Commit to Close—is designed for smaller companies to execute M&A with focus and agility. It emphasizes using a firm but flexible framework over a rigid, step-by-step playbook.