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20VC: Inside The Acquisition Decision-Making Process at Cisco, How To Measure True Success in M&A Evaluation & Why By Not Speaking To Corp Dev Teams You Are Closing The Door On The Biggest Potential Accelerator To Your Business with Rob Salvagno, VP of Co

Dec 30, 2019

Rob Salvagno, VP of Corporate Development and Cisco Investments at Cisco, shares his journey from investment banking to leading M&A for a tech giant. He discusses how Cisco evaluates startups for potential acquisition, emphasizing the importance of engaging with corporate development teams. Rob challenges the notion of avoiding these conversations, arguing they can significantly accelerate business growth. He also defines success in M&A and reveals key insights on post-acquisition integration, highlighting common pitfalls and the need for strategic alignment.

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ANECDOTE

From Banking to Cisco

Rob Salvagno's interest in technology developed during the internet boom at Stanford.
He transitioned from investment banking to Cisco, seeking a more strategic role.

INSIGHT

Booms, Busts, and Mindset

Market booms and busts shape investment mindsets, emphasizing long-term value.
Consider how business models withstand tighter capital markets and fluctuating valuations.

INSIGHT

Value Creation

Cisco prioritizes creating additional value in acquired businesses.
They leverage distribution channels and product integration to enhance operating models and growth.

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Rob Salvagno is VP of Corporate Development and Cisco Investments at Cisco, where he is responsible for leading all M&A efforts as well as managing Cisco’s strategic venture capital which invests hundreds of millions of dollars annually. At Cisco, Rob led the $1.2 billion acquisition of Meraki, one of the most successful platform acquisitions in Cisco’s history, and the $3.7 billion acquisition of AppDynamics, cementing Cisco’s place in the business intelligence, analytics and IT operations market. Most recently, Rob engineered the $2.3 billion acquisition of Duo, the leading provider of unified access security and multi-factor authentication delivered through the cloud. Prior to the world of M&A, Rob was a technology investment banker at Donaldson, Lufkin & Jenrette.

In Today’s Episode You Will Learn:

1.) How Rob made his way from investment banking to leading the M&A and venture activity for one of the world's largest tech players of the last decade?

2.) How do M&A teams like to get to know startups that they could invest in or acquire? How does Rob like to work with the venture ecosystem? How does Rob think on Paul Graham's comment of "do not talk to corp dev"? What are the nuances here? How does it differ for consumer vs enterprise?

3.) How does Rob define true success when it comes to M&A evaluation? Should corp dev be strategy first or transaction first? What have been Rob's biggest lessons on successful integration? Where do so many go wrong with integration post M&A? What questions can be asked ahead of time to know if integration and culture will be a fit?

4.) How does Rob reflect on his own price sensitivity today? How does Rob feel about the multiples enterprise companies are currently trading at? What have Rob's most successful acquisitions taught him about price and price sensitivity? How does Rob deal with the inherent conflict of investing and also acquiring companies? How does he communicate that to the companies he invests in?

5.) What does the acquisition-decision making process look like at Cisco? How does it differ on a deal by deal basis? What do Cisco do to allow them to move so much faster than any other M&A teams? What have been Rob's lessons on the importance of speed in winning the best transactions?

Items Mentioned In Today’s Show:

Rob’s Fave Book: The Poisonwood Bible

Rob’s Most Recent Acquisitions: CloudCherry, Voicea

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