A VC Perspective On M&A: Kevin Spain From Emergence Capital

Episode Summary:
Tune into this episode to hear from Kevin Spain, General Partner at Emergence Capital. Kevin’s background in both VC and corporate development over the last 20 years brings a unique perspective on how M&A have changed, the trends he is seeing in this space along with great advice for entrepreneurs looking to go public.

What is Uncovered: 

• How the landscape of M&A has changed over the last 20 years 
• Kevin’s advice to startups who are looking to make the M&A process go smoothly 
• Why startups shouldn’t be focusing their energy on exiting and instead should stay focused on building an amazing business and culture 
• Advantages and disadvantages of SPACS vs traditional IPOs 
• The trends Kevin is seeing in the VC space as it relates to IPOs 
• The common mistakes entrepreneurs make when negotiating with a buyer 
• Financial vs strategic acquisitions
• Advice to founders as they get approached from buyers

Learn more about:

Kevin Spain:
Working closely in a team of equals is what drew Kevin to Emergence. The mission of the firm excited him, and he loved the culture they wanted to build.

Early in his career, he co-founded and was CEO of atMadison.com. Founding and running a company in the heat of the dot-com bubble was an exciting and challenging experience that strongly influenced his decision to ultimately enter the venture business. Today, he enjoys the high of creating new businesses vicariously through the entrepreneurs he invests in.

He has also spent time as a senior member of the corporate development teams at Microsoft, and was part of the group that launched Electronic Arts’ original online gaming business. During that part of his career, he learned an incredible amount about digital media, online services, and software businesses from some of the most successful executives in the technology industry.

Kevin earned his MBA from The Wharton School of the University of Pennsylvania and completed his undergraduate education at the University of Texas at Austin. He is also a graduate of the Kauffman Fellows Program.

As a native Texan and foodie, he’s always trying to find great barbecue and southern food joints (though unfortunately there are few in the Bay Area). Kevin lives in Palo Alto and loves spending time with his wife and two sons.

Emergence Capital

Quotes: 

• “The best companies that we have worked with at Emergence don’t think about exits, they’re focused on solving a huge problem for their customers, building an outstanding business, and a great culture.” 
• On assimilating into a larger corporation: “How you show up in those meetings and your willingness to demonstrate that you can actually shift and work successfully in that kind of environment is something that I know acquirers are assessing.”
• “An IPO is a little bit of a rite of passage, it forces you to grow up, forces you to think about how much you can grow and serve your customers in ways you haven’t before, when staying private doesn’t necessarily force you to do” 
• On counseling companies on selling or not selling: “I listen to the entrepreneur very intently when it comes to decisions like this. They're the founders of the company, they had the vision for this company initially…. what is it in their guts that they really want to do or are drawn to?”
• “I think the real key is you've got to be in an area that is deemed highly strategic and just an absolute top priority for a company, and if you’re in that range, then you can expect a strategic deal rather than a financial deal. “

This episode was recorded on October 14, 2020