Don't Talk to Corp Dev

January 2015

Corporate Development, aka corp dev, is the group within companies
that buys other companies. If you're talking to someone from corp
dev, that's why, whether you realize it yet or not.

It's usually a mistake to talk to corp dev unless (a) you want to
sell your company right now and (b) you're sufficiently likely to
get an offer at an acceptable price. In practice that means startups
should only talk to corp dev when they're either doing really well
or really badly. If you're doing really badly, meaning the company
is about to die, you may as well talk to them, because you have
nothing to lose. And if you're doing really well, you can safely
talk to them, because you both know the price will have to be high,
and if they show the slightest sign of wasting your time, you'll
be confident enough to tell them to get lost.

The danger is to companies in the middle. Particularly to young
companies that are growing fast, but haven't been doing it for long
enough to have grown big yet. It's usually a mistake for a promising
company less than a year old even to talk to corp dev.

But it's a mistake founders constantly make. When someone from
corp dev wants to meet, the founders tell themselves they should
at least find out what they want. Besides, they don't want to
offend Big Company by refusing to meet.

Well, I'll tell you what they want. They want to talk about buying
you. That's what the title "corp dev" means. So before agreeing
to meet with someone from corp dev, ask yourselves, "Do we want to
sell the company right now?" And if the answer is no, tell them
"Sorry, but we're focusing on growing the company." They won't be
offended. And certainly the founders of Big Company won't be
offended. If anything they'll think more highly of you. You'll
remind them of themselves. They didn't sell either; that's why
they're in a position now to buy other companies.
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