Presentation for talk given at Code Camp Silicon Valley 2011.

1. Mergers & Acquisitions in Consumer Internet Sept 2011 contact Ashish Kelkar [email_address] http://www.linkedin.com/in/ashishkelkar

5. Do you want to sell? Typical target company - Launched, some traction, not the next instagram. - Freemium model, thousand plus users, tens to hundred paying customers. - Few angel investments (convertible debt), looking to raise first round of serious funding to start expansion. - Usually M&A teams are competing with Series A term sheets Considerations - Your expectations and reality check (market, traction, product) - Your personal financial situation - Your employees and their future - Potential dilution versus selling today

7. Talent / IP acquisitions - you have decided to sell Companies ideally want to evaluate the talent as early as possible and you want to delay this as much as possible - Why? - MOU / LOI / Term sheets are non-binding (except no-shop clauses) - The only reason I have seen companies walk away from deals is because the interviews did not go well. - Company morale - Confidentiality Bad news - you do not have much of a choice - Start with senior technical folks, founders, CTO, Chief Architect before term sheet then the others. - You could keep the team in dark saying we are evaluating a commercial partnership that could turn into an acquisition. - Set expectations with team about the deal falling thru for any number of reasons.

8. Talent / IP acquisitions - you have decided to sell How can you help? - Be as open as you can about the teams strengths and weakness - Share resumes, skills and your perceptions - Become part of the interview process, get and provide information on who may be the best interviewers The M&A team want's to help? - Sensitize our interviewers - Let them know that the stress level may be high (people are interviewing to keep jobs) - We like to get deals done, not rewarded for deals falling thru!!! What does the buyer want out of this exercise? 1. Make sure they are buying the real deal 2. Identify key employees 3. Enables distribution of stay bonuses (backend of purchase price)

11. Pro-rata of remaining equity Founder 3 and Employee 1 are superstars that we want to absolutely retain : we negotiate with the key founders and this is what the final resolution may look like. The above retention is in addition to a regular employee package **above example is illustrative only

17. I would like to demystify mergers and acquisitions, specifically in the web/consumer internet space. Proposed Agenda 1. What are companies in the consumer internet space looking for? 2. How do they find targets? 3. What could you do to become a target if you so desire? 4. Talent and product acquisitions versus others acquisitions. 5. To sell or not to sell? 6. What to watch out for? 7. Negotiations, Term Sheets - what should you care and what should you not care about? 8. Talent interviewing by acquirer, purchase price splits and emotional issues around employment 9. Avoiding diligence trip-ups - commercial contracts, open source, employment non-competes, PR. I was formerly with the Google Corporate finance and Corporate Development team (7 years) and did over 15 acquisitions. Would propose an hour with Q&A as we go along to make it interactive.