Hot Take: Must Watch Startup M&A TV
Five clips (+ bonus clip) that should frame your strategic thinking
If you haven’t already - get the second edition of the MBP book here. MBP.co makes a lot more sense if you’ve read the book!
It’s looking like 2026 is going to be a big year for startup M&A (and by extension developing commercial partnerships, strategic investments, and all the rest). There are a few clips I share with my clients so that they can keep some key concepts top of mind. I thought it was time I shared them with all of you. They’re just too important to keep under wraps.
For an idea to be big it has to be their idea
In the MBP book I reference the movie Inception and it’s where we’ll start. The movie itself is dark and and kind of creepy. The underlying theme is clearly nefarious (manipulating someone while they’re asleep!). But, the central point is too good to pass over as it speaks to the core of the MBP enterprise - for an idea to be big, it has to be their idea! It’s also notable that the movie is in fact about M&A (broadly speaking at least: it’s about breaking up and divesting the parts of a conglomerate).
When you’re building a Partner Big Idea (PBI) with a potential strategic partner (PSP) the first principle is that it has to be their idea. This doesn’t mean you can’t proact in its creation, or that you can’t influence and support its construction. But it does mean that you have to approach the process with a firm understanding that it’s not about convincing yourself of this wonderful new future, but instead it’s about igniting the imagination of the PSP.
I frequently speak with startup founders who are leveraging the MBP framework. They are creating all the layers of the PBI (Opportunity, Methodology, Execution, Economics), building beautiful Two Line Models (TLMs), and implementing all the other inputs to the PBI. However, they’re missing the one foundational point – it’s not about YOU doing all this work – it’s about the PSP participating in all this work. As I tell them, I’d take a clunky PBI, but one that has the PSP actively participating in its creation over a beautiful PBI that’s entirely the construct of the startup’s team any day and twice on Sunday!
You need to put all these tools to work with them, not at them.
PSPs want to work with people they like, and who are like them
The next most important thing after the PBI is you (and your team). The PSP’s team needs to see you as people they can work with for potentially years to come. Key collaborators who can fit into the culture of their larger company. This is almost assuredly quite different from the hyper-focused, type AAA personality that startup founders often exhibit – see Mr. Burns:
Yes there are times in the startup journey when Founder Mode makes a lot of sense, and when you have to channel your inner Mr. Burns and block out all the rest of your life in order to stay on mission. However, these modes aren’t sustainable, and they’re pretty foreign to all but the most intense PSPs. You might energize a VC conversation with this affect, but you’ll almost certainly come across as too much for a PSP. Get a read on their culture and style and think about how you might need to align yours to theirs.
Big deals are complicated, act like you haven’t been there before
Unfrozen Caveman Lawyer is mandatory viewing for all of my clients. Large transactions, and particularly M&A transactions, are really, really complicated. They are a giant web of terms, incentives, and risks each interconnecting with the other to create a multidimensional puzzle. You want to approach them with the utmost humility - and most certainly not rush to make decisions. Further, one of the favorite tactics of experienced negotiators is to accumulate incremental mini-agreements, each one embedding a fixed node (in their favor) in the giant network of the deal. The more fixed nodes of your prior agreements they create, the easier it becomes for them to fix the next one in their favor.
This is why you have to perfect your Unfrozen Caveman Lawyer: “my primitive mind is brand new to this world of M&A, I don’t understand your questions around risk sharing, or net working capital, or whatever, it’s all beyond me…” You’re just a tech founder, frozen in a YC incubator for years, now unfrozen in the midst of this complex deal negotiation.
Then assemble your deal team and figure out the very best way to construct the model!
And once you have the optimal model, approach its negotiation with precision (like Keyrock does!) - ensuring high fidelity for each position so that you can ensure each element is connected to the other in the most favorable way possible way!
The next two clips (and the bonus clip!) are about keeping your head screwed on straight.
