“Great companies are bought not sold” – Bram Sugarman, M&A Head, Shopify, at TechSparks 2016
Bram Sugarman left Canadian firm OMERS Ventures to help a newly public Shopify Inc. look for acquisitions, and to head corporate development and strategic partnerships at the company. The shares of Ottawa-based Shopify were traded on the New York Stock Exchange, raising over $ 130 million, and jumped more than 55 percent since going public in May.
Shopify has its presence in over 150 countries without having a physical office in any of them. In a fireside chat at TechSparks 2016 Bram explained to YourStory's founder and CEO Shradha Sharma how that happened,
We have over 3,00,000 stores on our platform in over 150 countries and that has been possible because we have always followed a universal approach in everything we have done.
The platform hosts small online merchants to big names like Tesla and Budweiser. It recently acquired Kit CRM, a company operating in the conversational commerce space. So what does Shopify look at while acquiring another company?
We look at three very important factors and check: if the company is building unique products, the culture prevalent in it and the thought leadership and its understanding of the space,
Speaking of how he comes across companies that are interesting enough for acquisition, Bram noted three major avenues:
- Unsolicited – phone, emails, social media, Slack (Bram is super active across all social media platforms)
- Personal networks – through friends, relatives, and recommendations (Bram touts this as highly effective)
- Product and technology groups – “When my developer pings me a link to a company which he think is really good, I never ignore it.”
Stressing on the importance of networking right, Bram said,
There is no harm whatsoever if founders themselves are actively looking for their company to get acquired but it is important to follow the right approach. Build warm relationships and work on them. Acquisitions may seem to happen in a jiffy from the outside but there is a lot of work which goes into it. It is a long process.
While the West sees frequent M&A deals, the scenario in India is completely different. Bram states the absence of a highly functional startup system as the reason.
I would define a highly functional startup system as one where there is a lot of VC money with a presence of highly successful startups and entrepreneurs,
he noted, underscoring the importance of partnerships that can serve companies, much like how it did for Shopify itself.
Bram believes partnership can be a pinnacle for all companies like it has been for Shopify.
Best companies are bought not sold.
Stressing on igniting the passion within ourselves, Bram concluded by saying,
The best things are built with honesty and expertise. Don’t listen to the naysayers and critiques; don’t build for the investors. Build with passion.
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