The Reality of B2B M&A: What No One Tells Founders with Brian Halligan, Co-Founder and Chair of HubSpot
"When you do get that rare, serious offer from a company like Stripe ...consider taking it seriously."
So a little while ago we did a very deep dive with Brian Halligan, co-founder and chair of HubSpot. One of the topics we did a deep dive on was mergers & acquisitions, and it was so good I wanted to just break out that portion of the convo:
Net Net: Acquisition offers are far less common than you think.
Despite HubSpot's success, Brian Halligan reveals they "didn't get any acquisition offers" in 18 years. No serious offer from Salesforce, and the Google acquisition rumors? Never happened.
The M&A Reality Check:
1. Big Company M&A Is Incredibly Complex
"Acquiring a company is a much bigger deal for a tech company than you think"
"The soft costs are much, much more than the cash or stock"
Integration can consume "10,000 hours of like expensive people's time"
2. Inbound Interest Is Everything
"If you want to sell your company, no one's going to want to buy it"
"It has to be inbound"
Hiring a banker to shop your company "never works"
3. Strategic Partnerships Can Suddenly Turn Into Competition
HubSpot had Salesforce as an investor and partner
When Salesforce wanted to enter marketing, they evaluated numerous companies
They chose ExactTarget instead, and "Salesforce went from being like our best friend to... a formidable competitor"
Once they bought a competitor, "not only does the window close for the acquirer, but you're competing with that big company"
4. M&A Decisions Often Come Down To One Champion
"There's gotta be one person" internally championing the deal
At HubSpot, "CEO gets the biggest chip"
Executive preferences heavily influence target lists, often based on "where they live, who they've met with, who Sequoia knows"
5. The Human Element Matters More Than You Think
In acquisitions, culture fit is crucial: "Would we like to work with this person?"
Adobe Sign / EchoSign once "failed the due diligence" on a potential sale because their CTO was perceived as not strong enough (despite later becoming a chief scientist at Adobe)
"You're being interviewed and the bet is on the people"
6. How To Stay On The Radar
Maintain relationships with potential acquirers
HubSpot sent quarterly updates to Salesforce executives: "here was going on at HubSpot, four or five slides, unit economics"
"Keep in loose touch" with strategic partners who could be acquirers
7. When Stripe Makes That Big Offer...
Brian referenced a company in his portfolio that "just got acquired by Stripe for a good number"
The deal emerged organically - not from the founder trying to sell
When you do get that rare, serious offer from a company like Stripe, consider taking it seriously
These opportunities come rarely and windows can close permanently if you pass
The Bottom Line:
When VCs and others talk on social media about M&A exits, remember: serious acquisition offers are much rarer than portrayed. Build relationships with potential strategic acquirers, but focus on building a standalone business.
As Halligan put it, their goal was "to build a company our grandkids would be proud of."
Top 4 Unexpected M&A Learnings From HubSpot's Journey:
1. Even $30B+ Companies May Never Get Acquisition Offers
Despite becoming one of SaaS's biggest success stories, HubSpot never received a serious acquisition offer in 18 years. This contradicts the common narrative that successful companies are constantly fielding offers.
2. Strategic Partners Can Become Your Biggest Competitors
When Salesforce invested in HubSpot, they were partners. When Salesforce decided to enter marketing automation and bought ExactTarget instead, they became formidable competitors. The same strategic interest that makes a company a potential acquirer can make them a dangerous competitor if they choose another path.
3. One Person's Opinion Can Kill Your Deal
Jason at Adobe Sign / EchoSign once "failed the due diligence" because someone thought their CTO wasn't strong enough - despite him later becoming a chief scientist at Adobe. M&A decisions can hinge on surprisingly subjective assessments by key individuals.
4. "Lead Nurturing" Works For Potential Acquirers Too
Just as marketers nurture leads, HubSpot "nurtured" Salesforce executives with quarterly updates for years. This deliberate relationship maintenance strategy keeps you on the radar without actively selling - creating optionality without desperation.