Hi, it’s Thomas from Positive Capital, M&A advisory dedicated to VC-backed companies.
Today, I’m sharing an observation about the organizational dynamics behind every corporate acquisitions.
A few months ago, I had a conversation with a founder who had just exited.
He was happy with the outcome. His company had been acquired by a PE-backed player — good terms, clean process. But it wasn’t his first choice.
A year earlier, he had been deep in conversations with the corp dev team of a major US tech company. Months of calls, follow-ups, introductions. At some point, he told me, he started to believe it was happening. He could see the headline on TechCrunch. He was already thinking about what came next.
Then, nothing. The conversations slowed. Emails went unanswered. He tried to accelerate by launching a formal process, thinking the competitive pressure would force a decision. Instead, the corporate dropped entirely.
When I asked him what he thought went wrong, he said something that stayed with me.
“I thought the discussions were advanced. I don’t think they ever were — not on their side.”
That gap — between what looks like traction to a founder and what’s actually happening inside a corporate — is one of the most common and most painful dynamics in Tech M&A.
For a deal to happen with a corporate, three roles have to align.
- Corporate Development maps the market, identifies interesting companies, initiates conversations. When a corp dev reaches out, it means a company is on their radar. Their job is to connect it with the people who will decide whether to deploy resources for a strategic assessment.
- The Product Champion runs the internal assessment — build versus buy versus partner. Getting to “buy” is already a significant filter. Most ideas die here.
- The Executive Sponsor is the P&L owner whose strategic objectives are directly served by the acquisition. They present the opportunity to the board and put their political capital behind the deal. These three roles are rarely sequential and never fully separate. In practice they work in parallel, sometimes in tension. The politics are messier than any framework suggests.
Besides, M&A decisions are made in committee.
To get a project prioritized over another — to allocate budget, people, and attention toward a deal — someone has to win that internal fight. That someone is the executive sponsor.
Corp dev can surface an opportunity. The product champion can recommend it. But without a P&L owner willing to spend their political capital on it, the opportunity stays exactly where it is.
In my experience, what gets an executive sponsor engaged is rarely the product itself. It’s the conversation about the external forces reshaping their market — shifts in customer behavior, emerging competitive threats, new technology capabilities creating gaps that didn’t exist two years ago.
A founder who has been building in a space for several years tends to see these signals before most people inside a large organization. They’re closer to the ground. They see what’s changing in the conversations with their customers, in the deals they win and lose, in the patterns emerging at the edge of the market. When that knowledge connects with the P&L objectives of an executive sponsor, the nature of the conversation shifts. It stops being a vendor evaluation.
That’s what was missing for the founder in the opening. The corp dev engagement was real. The product team enthusiasm was genuine. But the deal never reached someone with the power and the pain to act on it.
Indeed, Corp dev puts you on the radar. The product champion gets you to the assessment. But without the executive sponsor, the opportunity stays in limbo — and limbo, in M&A, is a polite no.
Thanks for reading!
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