Optimizing Your Corporate Development Team

Andrew's Background in M&A

I've been in the deal business a lot. So I've done roles like this at IBM, Dell, a private equity portfolio company, and I'm also a recovering investment banker. I've seen a lot of different things, both on the buy side and the sell side.

Here at Five9, I've been here for two and a half years. Just a little perspective on Five9: We've been in the customer experience business for 20 years. What Five9 is doing is helping customers streamline their contact center experience by delivering AI in a purposeful way, so that, for example, the Genius AI launch that we had recently wrapped a process around what can be a very complicated, large language model, natural language processing, machine learning ecosystem of technology where customers want solutions.

As technologists in the room, we wrap a solution around a technology so that customers, unless they’re the CIO or VP of engineering who really wants to get into the weeds, don’t have to. Of course, we are sort of multimodal when it comes to different technologies, but ultimately they just want a solution that works to either save them time or save them money.

The Importance of Speed in M&A

Speed is underlooked in business. There are multiple vectors to speed: strategy, product roadmap execution, and financial velocity. Growth drives valuation about two-thirds of the time, with profitability about one-third.

For your product roadmap: how quickly can you execute on that three-year vision, five-year vision, and beyond? There's also a financial element. In the technology space, for the 20 years I've been analyzing valuations, growth has consistently driven about two-thirds of valuation, with profitability making up the other third—through booms and busts.

We could debate whether we're in a bubble period for certain semiconductor stocks, given the demand for processing power to support AI. The need to push more data faster to uncover emergent properties in new AI models is driving this trend. But for me, it comes down to simple fundamentals.

Strategy fit, product fit, financial fit, and ultimately cultural fit. If you can’t have executives in a room having a constructive conversation or over a meal, and the chemistry is just not there, rarely is it going to matter that it’s the best financial deal ever. Hostile takeovers don’t happen often in this space. Usually, these are friendly conversations that need to be had.

Foundational Skills for Corporate Development

 Communication is a huge one. I tend to like folks that over-communicate. Junior team members who proactively provide updates and ask for help stand out. Communication evolves by audience: internal teams, executives, boards, or shareholders. Without communication skills, it’s hard to grow in this role.

 Say things like, “Here's the things that I need help with, here are the things that I was supposed to deliver and here's the status update on them.” Or if we don't have a one on one, or there's no natural meeting every couple of days. Update me on what you’re working on. A lot of time I will proactively say, “hey, how can I help you?”

I don't always have time to do that. So communicating back and forth, that's important. And that scales with them because how you communicate as an analyst is different from how you communicate as a manager versus director versus VP versus SVP. All the levels of communication are a little bit different

 And it's about the audience. Who's your audience? Is it internal? Is it the executive team? Is it the board? Is it shareholders? Each one of those different audiences changes how you would communicate. Without communication skills, it's really hard for me to see how a junior person's going to succeed for a whole host of reasons.

 The other thing I would say is just basic numeracy.  When I first got into investment banking, many major directors say this job ain't hard. It's math errors and typos. Don't have math errors. Don't have typos. We are not deriving Black Scholes from scratch.  We are not using any differential equations. It's mostly division and subtraction, sometimes multiplication. There's just a lot of it so it can get quite messy.

Command skills at some point are also critical, because what I like to see junior folks grow into is the ability to lead larger teams without my presence.  I want to be there. I want to help. I want to support, but the best scenario is where I can get a junior person doing the 80% and I'm doing the 20%, which means that they've got the command of lots of people. At a due diligence kickoff session, we might have 50 or a hundred people on the phone from various different functions. Sales, finance, HR, legal, tax, IT, marketing, support, professional services, you name it.

 Pace of play is important too. No seller ever has told me, “you can have an infinite exclusivity period. Just take your time, do all the diligence you want, and just tell us when you can put a bid in.” That's not how it works. It needs to be time boxed because they've got a business to go run. And as a result of that, being really efficient in diligence is critical.

So those are some of the things that I would say I look for, and I think are very helpful in terms of team scaling. Here’s how I look at folks. I hire people based on do I think that they can take my job one day? And if I don't think that, really do I make a hire? 

Diplomacy in Corporate Development

The role is tough because you often don't have direct reporting authority over the people you need to do the work. Some individuals are eager—they’ve done M&A deals before, understand the process, and are excited about moving the company forward. Others may feel, “I have a day job, and now I’m being asked to do this on top of everything else under a tight timeline. How am I supposed to get it done?” That resistance can be challenging.

Diplomacy involves figuring out if someone can be won over or if it’s a situation that needs to be escalated or addressed with change management. Ideally, you have consistent subject matter experts or workstream leads across deals, but that’s not always possible. It’s important to recognize when someone is overloaded and find a way to replace them—without making them feel like they’ve lost an opportunity or suggesting they’re not capable. The goal is to do what’s best for the company, which means ensuring the best subject matter experts are involved in each function for every deal.

These experts are essential. You can have a standard list of 500 questions for diligence workstreams, but it’s the expert who knows which questions aren’t on the list or which ones aren’t relevant for the deal. They refine the list to uncover what the company truly needs to know and where to focus. That expertise can’t easily be taught to someone without experience, which makes diligence more challenging for them.

Experienced individuals stand out—they’ll crush their tasks, produce excellent results, and require little oversight. But like anything, there’s a distribution of talent, and diligence reflects that reality.

Developing Team Members

When it comes to developing junior team members, the first thing I do is focus on their growth. I follow HR’s annual cadence of reviews, but I ask, “What do you want to add to your resume in the next couple of years? What skills or experiences are missing?” We then plan tactically to help them develop those skills.

For example, if someone wants to present to executives, we’ll find the right opportunities. Some meetings, like those involving sensitive or contentious transactions, aren’t ideal for junior team members. But for routine updates or well-developed projects, it’s easier and more beneficial to let them take the lead, especially if they’ve done the work.

Part of my job is, of course, taking credit for junior people’s work—how else do you advance in corporate America? But I also focus on long-term efficiency. I’ve built countless comparable company sets, precedent transactions, and discounted cash flow analyses. I don’t need to do that work again; it’s about giving junior team members the chance to develop those skills while I guide them.

People often operate on three levels: their current role, the role below them, and the role above them. I tell my team, “If you want the next job, start doing it now.” To help them, I find opportunities to build confidence and competence, whether in executive communication or delivering high-quality work. Perfect work is free of errors, internally consistent, and aligned with expectations—it’s crucial in corporate development.

If someone stumbles, I give constructive feedback. For example, I might say, “When someone says this, they mean that. You answered this way, but a better response could be XYZ.” Letting them take the lead means letting them own their moment, even if they make mistakes. It’s important not to undermine them by stepping in unnecessarily.

Ask The Extra Question

“Ask the extra question” is about pursuing clarity and truth. In corporate development, there are learning environments and doing environments. In a learning environment, there’s time to explore and refine understanding. In a doing environment, there’s a hard deadline, like preparing materials for an 8 a.m. board meeting. In these situations, teaching and coaching take a backseat to execution.

In learning environments, asking the extra question helps junior team members save time. It clarifies the task, the goal, and what’s already available to prevent them from making unnecessary assumptions or errors. It also ensures that analysis remains accurate and meaningful.

At senior levels, asking the right extra question becomes a critical skill. It helps move meetings forward, make decisions, or take action. This is a skill that will always be valuable, regardless of how roles evolve over time.

 It would be amazing if we had AI bots in corporate development. Our bots ask the seller questions, their bots answer back, and the humans can just go out to lunch. That would be amazing, but I think we're a little bit far away from that.

And so, until we get there, given the nuances and complications with certain businesses, It's hard to anticipate how somebody who's not a subject matter expert  is asking general questions. How are they going to get to the heart of the matter without asking the extra question?

Building an Efficient Team Setup

I’ve been both the lone wolf—the sole person in corporate development with nobody else—and part of large teams with 20 people. It comes down to understanding your end customers, which are often the GM of a business unit or the CEO of a company. Who are they? What’s your velocity? Are you doing a deal every few years, or are you closing one every quarter? These factors dictate team size and the kind of support you need.

If you’re private equity-backed, you’ll typically have support. For example, you might not have to think about new debt financing because there’s likely someone at the private equity firm—a former debt finance expert—whose job is to handle leverage finance, senior loans, mezzanine convertibles, and relationships with Wall Street banks. They can get you rates, terms, and credit ratings far easier than you could on your own.

Setting up the team requires thinking about what your end customer needs, your velocity, and your scope. Are you only handling acquisitions and have a separate integration team? Will you also take on venture deals, joint ventures, or OEM partnerships? The scope of inorganic activity you’re balancing alongside organic efforts dictates the structure needed for success.

Risk management is another critical aspect. You want redundancy in the system because humans miss things. On a multi-billion-dollar transaction, if you only have one person working on it, you’re going to overpay or miss something—no question about it. It’s impossible for one person to know everything. Success comes from layering in redundancy: someone takes the first crack, and someone else reviews. It’s difficult for the brain to act as both the doer and reviewer of work simultaneously. I’ve tried to improve at this over the course of my career, and I still struggle with it. It’s particularly hard for junior team members, and the same challenge applies to everyone.

So, the team setup really depends—on team size, the configuration of deals, velocity, and ensuring adequate coverage and reviews from subject matter experts. It’s not the most satisfying answer, but it’s the reality.

How Culture Affects the Deal

Culture is another critical element, and to me, it comes down to people. The culture at the top dictates the culture at the bottom, whether you’re on the buy side or sell side. How the executive team interacts with each other is usually reflective of how the teams below them interact.

In a management presentation, site tour, or follow-up meetings, how senior people treat junior people—and how junior people respond—is a strong indicator of cultural dynamics. Sometimes I’ll ask two or three people the same question about vision, mission, or strategy—something macro-level that everyone should know. This helps me gauge how consistent communication and messaging are across the company, which is another key cultural signal.

There are simpler ways to assess culture too. For example, looking at Glassdoor reviews can tell you a lot about a company. One time in my career, we were concerned enough about an executive at a target company that we had a third-party firm conduct a background check. In retrospect, I now believe that if you feel the need to run a background check on an individual, you should seriously reconsider acquiring that company—or at least ensure that individual isn’t coming along with the deal. If there’s potential liability, it’s a risk. Where there’s smoke, there’s often fire.

Ultimately, as a buyer, you need to protect yourself because the seller will always know more than the buyer in any transaction. That’s just the nature of it. Your role as the buyer is to know enough to make an informed decision.

Handling Deals When the Culture’s Misaligned

When evaluating a deal where the CEO doesn’t seem like a good culture fit, but the rest of the team looks promising, my perspective has evolved over time: life is too short to deal with situations like that. If the CEO isn’t backable or acquirable, the business is likely best left alone. That’s because, in most cases, the CEO’s leadership trickles down. If the top person isn’t aligned, their direct reports are often not far behind.

Now, if you’re talking about carving out specific pieces of a deal, like acquiring intellectual property (IP), source code, or a specific team—where the CEO isn’t central to the deal—that’s a different conversation. In those cases, you don’t necessarily need the full team to come along. 

However, in a whole-company buyout, if the CEO or top executives aren’t a good fit, there needs to be a really compelling reason to move forward. Otherwise, it will likely come back to bite you harder than expected, and the damage will outweigh any perceived upside.

Nuances like this vary deal by deal, and every situation has its exceptions. My mindset tends to lean toward walking away because there are always other deals to pursue, and people are fundamental to getting things done. Unless the deal revolves purely around assets or IP, it’s extremely challenging to separate culture and leadership from the company’s success.

In tech acquisitions, for example, acquiring the code without key developers can be problematic. Developers often want to rebuild the code in frameworks or languages they prefer, essentially treating the acquired code as a “starter kit” rather than a finished product. That creates inefficiencies. If the leadership team or cultural misalignment feels off, that’s often a clear sign to look elsewhere

What Makes a Good Deal?

 It starts with recognizing what are the elements that you want to go after. In corporate strategy and inorganic growth, I break it into four areas: strategy, sourcing, execution, and integration.

On the strategy and sourcing side, I look at:

1. Company size – What’s the scale, and how does it fit our ambitions?
2. Growth and profit profile – Does the trajectory align with our goals?
3. Product portfolio – What value does their offering bring to us?
4. Management team and people – Do they have skills and cultural alignment?
5. Storytelling – Can we explain this to our employees, customers, and partners? Does it make sense to our board and investors?

What is the growth and profit profile of the company? What is the product portfolio of the company? So what does the management team look like? What are the people based and what are their skill sets? 

Why is this a better story? It's going to be better for them because either you've got a broader offering or there's going to be an integration that makes the two companies offering more seamless and that means maybe one less screen pop or one less application to view. Then ultimately to the board and investors, why does this make common sense?

I often say that a lot of times, if you can't explain it to your grandma, your golden retriever, it's too complicated. It's looking for deals that the explanation in one sentence is pretty clear. 

When to Walk Away

 Oh, there are many. One of the things that I've seen pretty consistently in my life is Deal heat. So you get emotional lock in on a deal because you don't have a plan B. I am always pursuing two assets in a space and taking them right up to the altar before crossing that threshold so that you don't get emotionally locked into something.

If you don't have a walkaway price, we are willing to pay up to this and not a penny more. That's also a slippery down slope where you can talk yourself into anything because valuation is an art and a science. You can go and cherry pick a set of precedents or comps or multiples or whatever to justify almost anything.

When I was at UBS, I had one senior banker. I'd go ask him questions about valuation. His first question is always, are you the buyer or are you the seller? Because his advice is going to be different. If you’re the buy, you're trying to get the lowest price. So you're going to skew low on the comps.

If you're the seller, you’re trying to get the highest price. You're going to skew high on the comps. And that dictates how you think about valuation.Those are a couple of things that I would do in order to figure out what is the right time to run away from a deal because you're going down that slippery down slope because you're emotionally over investing. 

That makes you think that we have to go through with it now, even if it's above our walkway price, that's not true. That's not how the world works. You can always back away from a deal. Yes, there is rocket science, but in most cases, this is not rocket science unless you're actually buying rockets. 

Over time you develop systems and processes in order to help you perform a little bit better. If you've been around the block a couple of times, maybe you'll remember them, but if you want to build a scalable team, articulate the process to other people, it'll make your process better and it'll help the company not get into harm's way inadvertently.

It could come down to asking that extra question. Are we at the threshold of our walkaway price? Or having done diligence, has our walkaway price changed from before diligence because we had a set of assumptions about revenue trajectory or product velocity? 

You can have a relatively hard line position, but having a hard line position in the face of new facts, that's not rational. You have to consider the new facts at every turn, because in most deals, every week or two, you're going to learn something that's materially new to you that you did not know a week or two before that should change how you think about that deal.

Efficiency in Due Diligence

 It's about prioritization. What are the two or three work streams where I think the real radioactive waste is, do I think that there is open social vulnerability in a particular company?

Do I think that what they've been talking about from a bookings and pipeline perspective is not true? Do I think that what they're saying about their ability to get from total adjustable market A to total adjustable market B in the next couple of years is true or false? Really go in on those things versus legal. For example, commercial contracts.

If it's a larger company and they don't have any customer concentration, the commercial contracts are relatively benign. Could you go and investigate a thousand commercial contracts? Yeah. Is that the best use of time and diligence? No. You can kind of already have a sense of where issues are going to come up.

Predicting Contract Value and Churn

So it's gross and net retention. It's customer tenure. If you've got some customers who have been around for a decade plus, that's amazing. It's also third party validation. If you're a CEO and you're selling a company to me, now the last thing you want me to do is go start directly calling your customers in the middle of diligence.

So typically in the last 20 percent of diligence, some customer calls can be made and either those can be made directly by the buyer, or I find that sometimes sellers are more comfortable having a third party whose job it is to do customer reference calls to do it without mentioning the buyer's name.

So that way it doesn't leak out that buyer X is calling customers of target Y and that third party can have a script, a set number of customers to call. That script and the list of customers provided by the seller can be approved. And the actual work product of that third party market research firm can be sent to the seller as well, because they can use that to improve their business.

And typically these are not big dollars. You're not paying unless you're getting one of the big consultancies. You're not going to pay a million bucks for that. You’re getting some peace of mind that customer contracts or customer happiness or customer retention are where you think they are versus what's up on the website.

Websites are notoriously lagging relative to what's actually happening at a business pre LOI. I think it's customer concentration. Is it more than 20 to 40%? Because that gets really hard. It's customer tenure longevity because the longer, the better, the more likely the customers are to persist.

It's simple things like NPS or CSAT scores. If they're not even measured, then how do you know how happy your customers are? Step one is, if NPS and CSAT scores exist, great. Because that means that there is a focus on customers and keeping them happy. If NPS and CSAT scores exist and they're good, that's even better.

That's a good indicator that things may be going well. So there's a bunch of different ways that you can slice and dice. Ultimately, there may be ways to get some channel checks or some market checks. Because if they're not all direct customers and they're selling through channels sometimes, channel partners can be common.

It's talking to channel partners about how product X, or how is this category product Z sort of performing in your channel? What is the general feedback? What are customers like? What are customers not like? Is it doing well in North America only? Is it doing well globally? Those are things that you've got to find out if you've got a network, if you really want to understand customers at a deep level.

Key Players to Bring into Your LOI

In all situations, at a minimum, it’s the CEO, CFO, and maybe a few others in executive staff. Eventually, it’s got to get to the board because the CFO has certain authority, then the CEO has certain authority, and then the board has a different authority. Let’s say it’s $10 million, $100 million, and $1 billion as thresholds for who can sign off on a particular M&A transaction. Even if that’s formally how it’s written, as a courtesy and for good hygiene and communication, you may still want to communicate even if you don’t actually need the board’s authority to go and execute a transaction.

There are a whole host of reasons why it should be kept very small at the early stages. The first is that you don’t know if the company even wants to sell to you. In the market that we’re in right now, where the odds of a recession in 2025 are around 45 percent according to the last economic study I heard, sellers may want to get out right now or they may want to wait a couple of years for the other side of the recession when the IPO window might reopen. 

If buyers and sellers are too far apart, the deal might never happen. You don’t want a whole bunch of people in the know or emotionally attached to a deal that’s not going to happen anyway.

You need some basic level of information at this stage. Fortunately, between Google, LinkedIn, CapIQ, FactSet, CrunchBase, Glassdoor, PitchBook—there are so many different resources out there that you can put together a one-page company profile in an hour or two, depending on how proficient a junior person is. After that, you can get a little bit smarter.

What I typically do is tell a founder or CEO, “In order for us to get to LOI, I don’t need you to go out and get a banker,” though sometimes I do encourage founders to get a banker because it really will help them. I can’t be on my side and their side at the same time, even though I’m trying to help them help themselves. 

I’ll say, “Hey, I want to send you a list of maybe five to ten questions.” Usually, it’s things like quarterly financials—bookings down to EBITDA, maybe. I might ask for a customer cube of some type, and they can redact it. I don’t need the names of their customers, but I might want to see, let’s say, their top X customers representing Y percentage of total revenue based on geography, product SKU, or something like that.

The cap table is also important. Who owns what? You need to know who you’re talking to because whoever owns the most shares is going to be calling the shots. If that person isn’t in the conversation, the first question is why, and the second question is when will they be part of the conversation? You need to understand your audience in order to articulate how you’re going to approach them. I also ask for things like a high-level product roadmap—what are the things they thought they were going to build that would get them to the next level? And maybe a few other things, but I keep it simple.

It’s not a hundred-hour request from someone who doesn’t know if this is going to get there or not. They don’t know if it’s going to be a huge distraction, but they may have an idea that the buyer is earnest, and they still have a business to run.

 The key is to gate and meter the ask to the moment so you’re not overreaching. You want them to feel comfortable that they’re taking a step that’s going to lead to a specific outcome, whether it’s a go/no-go decision, a non-binding LOI, or a specific kind of meeting to get them comfortable.

Sometimes it’s just dinner. In a 90-minute dinner, you can accomplish so much. It’s not necessarily about getting into the conference room over banker boxes and pulling through thousands of pages of data. It’s talking about strategy and vision, about product, and about where the one plus one equals greater than two conversations could be. It’s figuring out whether you believe the same kinds of things or not.

Building Relationships in M&A

In the first 20% of the deal, you’re in the honeymoon phase. It’s the stage where sitting down for a cordial meal makes sense. You’re building relationships, and the conversations flow naturally. 

But as you get further along, there’s a natural shift to contention because the seller wants the highest price, and the buyer wants the lowest price. That’s where you hit the puts and takes, the back-and-forth in terms of the LOI or the stock purchase agreement or asset purchase agreement. 

In those moments, it’s hard to sit down and have a meal without the deliberations of the deal tainting the appetite over some rubber chicken. At the very end—during the closing dinner—that kind of interaction works well again, but there’s always going to be this messy middle where communication becomes more standoffish. It still needs to be good rapport back and forth, but it’s not going to be as chummy.

These meetings, when things get to that contentious middle phase, often happen over coffee instead of dinner. By that point, the deal starts to expand. You’re building out key assumptions and the deal thesis, which becomes much more detailed. Once the LOI is signed and you kick off diligence, you have to be a good communicator to manage it all.

Running Due Diligence Kickoffs

These days, we mostly run diligence kickoffs virtually because people are more distributed than ever before. Back in my IBM days, we’d go to the IBM Learning Center—a massive property with an amphitheater in it. Imagine sitting in a movie theater with someone down in front saying, “This is what we’re going to talk about today,” with the entire movie theater full. 

That’s old school. Today, it’s virtual, and you need to be very precise. You explain why people are invited to the diligence kickoff, what’s on the agenda, what the timeline is, what’s expected of them, and what the next steps are. 

You show them where the information already exists or where it’s going to be stored. It’s very straightforward—who, where, when, and what—so you don’t waste people’s time. You need your diligence team to be as effective as possible, focusing their brainpower on diving deeper into HR, IT, finance, legal, or whatever the hot-button issues might be, instead of worrying about administration.

A diligence kickoff session should be about an hour. It’s great to have someone from leadership kick it off to explain the “why.” I can do that and have done that, but I love involving other people. It’s not because I can’t do it—it’s because I want accountability. 

I always look for accountability because I consider it a failure if I have to pick up someone’s work and do it for them. Either I failed to figure out why they couldn’t do it, or I picked the wrong person for the diligence team, or I didn’t support them in a way that let them feel confident and capable of being out front and center asking the right questions with their counterparts. 

When it comes to setting expectations for reporting and findings, it’s pretty straightforward. It’s PowerPoints and spreadsheets. I’ve looked at AI tools that might automate parts of the diligence process, and of course, there is DealRoom and other tools for collecting data. 

But it’s really about being thoughtful and crisp—figuring out what people need to know and cutting through the noise. If it’s a particularly thorny solution or issue, I might beta test it first. Before rolling it out to the full team, I’ll pick two people from impactful workstreams who are subject matter experts and have been through multiple deals. 

I’ll say, “Here’s what we plan to use for the diligence kickoff. What’s confusing? What could be clearer? What do you think the team might benefit from?” It’s like beta testing software before a general availability release—you’re minimizing questions, frustration, and inefficiency. It helps ensure the session lands well.

Holding Your Team Accountable

Accountability issues come up all the time. It often comes down to figuring out how to support someone before any hard deadlines, like the expiration of exclusivity or a board meeting. Life happens—people get sick, or they have a family emergency. It’s not always about someone not doing their job. 

Sometimes they just get taken off the field. You have to find a way to work with their boss, a peer, or someone else in that function to share knowledge, restart, or pivot quickly so diligence can keep moving.

You also have to play the long game. You might need that person or that relationship again, so you can’t treat them like a widget that fell off the machine. If you act like they should have kept going regardless, you’ll never get their best effort again—and you probably deserve not to.

The function of corporate development is so unique compared to other functions in an organization. It’s the extreme case of cross-functionality—it’s entirely dependent on other functions and working with them. That’s why you have to treat them as part of your team and support them effectively.

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