As a strategy, pursuing acquisition is supposed to allow businesses to grow their value. In reality, that isn’t always the case. Studies show that nearly half of these transactions fail to see value creation as a result of acquisition. Why is that? Well, one reason may be that M&A is disruptive to stakeholder relationships. The challenge for investment firms is to strike the ideal balance between creating enough change to see accelerated growth in the companies they acquire or invest in and preserving the brand and core values of those companies so that key stakeholders feel secure. Great investment partners are able to look beyond the bottom line so they can evaluate and adapt to the dynamic relationships that make each company unique. Firsthand operations experience can help.
Today’s guest is Russell Fleischer, a former 3X software industry CEO and current general partner at Battery Ventures, a global technology-focused investment firm with a collaborative research style. At Battery, Russell is focused on new opportunities in the enterprise software sector, typically later stage transactions including buyouts, roll-ups, and take-privates. His experience as a CEO has allowed him to engage on a personal level with his portfolio company CEOs, coaching them and their teams to create more stakeholder value.
In this episode, Russell sits down with Tom Ryan to discuss Battery’s research-driven approach to choosing investments, how current issues are affecting the tech industry, and how he approaches the human elements of mergers and acquisitions.
Highlights:
- Russell describes his early career journey through the software sector (03:54)
- Russell explains how his experience with private equity as a CEO led him to Battery (07:43)
- The challenges of being a CEO, and why an investor with firsthand experience can help (10:42)
- Why management teams shouldn’t be afraid to make personnel changes (13:06)
- Battery’s research-driven approach to choosing investments (15:49)
- Russell’s observations of where the technology industry is moving geographically (19:31)
- Russell shares his thoughts on how the tech industry has responded to recent market shifts (22:11)
- Russell explains why he believes the social aspect of companies has such a huge impact on success during mergers (24:54)
Links:
Feedback:
If you have questions about the show, or have a topic in mind you’d like discussed in future episodes, email our producer, elizabeth@lowerstreet.co.
