How to sell a company to Microsoft

Gelsey is the post-lunch speaker at BVF this year and started off by reminding people about Bizspark and www.bing.com/developer.

Gelsey thinks that to outsiders, the acquisition process is pretty opaque, so he says the first question to answer is Why would Microsoft need your company? Figure out where Microsoft is going, so you can slot yourself in. Here are some trends:

• In ten years every OS and application will be "cloudified" - every application will be aware of the elastic, available resources that are in the cloud. He sees these resources as something people can fall back on, like a rental car when you are travelling. Helping with back up and economies of scale.
• Moore's law is alive and well - what are the implications of this? Be careful as you are thinking about cost reduction and cost management, as those costs are dropping dramatically.
• Multitouch and other UI innovations - what can the applications be that support multitouch? Gelsey asks people to let their imaginations run wild with that could look like. What can you do once you have this new UI of gestures?
• Search will be a utility - search as an application or web service. What if your application has access to search, cheaply and ubiquitously. How would that augment what your application brings to the table?

Once you've nailed one of these trends, how does the acquisition process work? First, acquisitions are an analytic process in combination with an aesethic process. How well will that company work with Microsoft? When you put the two teams together, what will that look like?

Some other points: Free cash flow is a function of product. Geography matters - the friction that borders and tax laws creates. IP matters - be careful about keeping track of your code. Emotions matter - think about the emotional signalling you bring in. Social intelligence matters - your abrasive personality will absolutely kill a deal no matter how smart you are.

Acquisitions are a subjective process. Deals die for the strangest reasons. Make sure people understand what your perception of value is. Be sensitive to concerns about scale when talking to a company the size of Microsoft. Eliminate as many friction points as you can - have your investors deck be 100% complete, be prepared and be quick (see: Deals die for the stragest reasons).

What's the right way to engage with Microsoft? Send an [e-mail]. Probably a good idea to send the 10 slide deck that makes it clear why you should be acquired. Dispense with your NDA, just use Microsoft's. Ultimately the best way to get noticed is to perform. Stand out in the crowd.

Read more: http://www.techvibes.com/blog/jon-gelsey-director-of-acquisitions-and-investments-at-microsoft-talks-tactical-at-banff-venture-forum#ixzz0SpKu8NSf