Corporate development teams handle everything under the umbrella of acquisitions, investments, partnerships and divestments, as Stephanie Martin from REA Group explained. For her team, this means managing origination opportunities, live projects, and constantly monitoring whether they have the right assets in their portfolio.
Vlad Gagovic, drawing from his experience at Car Group and Envato, emphasised that corporate development exists to accelerate company strategy. As he put it, there are capabilities that companies might not want to spend seven years building internally. When someone out there is already doing it well, corporate development steps in to explore whether acquisition or partnership makes more sense than building from scratch.
The relationship between strategy and corporate development is crucial. Strategy teams work with executives annually or bi-annually to set forward-looking priorities, and corporate development's role is to execute against those strategic pillars through external opportunities.
The process starts earlier than most founders realise. Once a company's strategic plan is clear, corporate development teams begin market mapping to identify complementary startups and businesses that could serve that vision. Vlad described this as proactive outbounding to meet startups and understand what they're doing, whether there's value to explore together, and what the right partnership or M&A construct might be to achieve a win-win outcome.
When evaluating which companies to approach from their market maps, both speakers emphasised several key factors. They look for customer traction, unique points of difference, and founders with relevant experience who they feel they can work with. As Stephanie noted, when she worked with Vlad previously at REA, with her on the strategy side and him on M&A, they would work closely to identify market sets based on these criteria.
Perhaps the most powerful signal comes from internal advocates. As Stephanie explained, business unit leads within REA are crucial advocates for new opportunities. When someone from inside the business reaches out saying they'd like to work with a particular startup, that provides an incredibly strong signal that it's worth investigation. These internal relationships often make the difference between getting noticed and being overlooked in the sea of startups.
One of the evening's most encouraging stories came from REA's recent investment in a UK startup using natural language AI to transform property search. The company was too small to meet at major property conferences, so Stephanie cold-reached the CEO on LinkedIn. Despite the unconventional approach, this led to six months of conversations and ultimately REA leading their funding round.
This example challenged the common fear among founders about approaching large corporates. As Stephanie admitted, she's personally much better with email than LinkedIn because LinkedIn messages get buried, though she acknowledged the irony given this successful example. Her advice was practical: include a teaser document when reaching out via email, as it's easier for someone to click into a document for a quick look rather than having to arrange a call immediately.
The initial conversation between founders and corporate development can feel like an awkward dance, as Alan Tsen observed. Founders worry about revealing too much while corporate development needs enough information to assess opportunity.
Stephanie's approach to this tension was refreshingly direct. Her message to founders is simple: don't share something you're not comfortable sharing. If you're not ready because you're concerned someone could replicate your business, then wait until you're comfortable pitching. As she put it, "We don't have those conversations to get ideas. If it ends up that we've done something similar, it would have already been in the pipeline."
Vlad offered a practical framework for staggering information. Initially, companies need just a couple of slides on how they solve customer problems, plus any expectations about valuation and desired transaction type. This provides enough information for meaningful discussion without revealing proprietary details. Based on that conversation, corporate development can indicate whether there's strategic alignment worth exploring further.
When asked about founders' fears of corporates stealing ideas, Vlad was blunt: "I've never actually seen that happen in my 10 years where you bought something and someone said we're stealing their idea." While he acknowledged Facebook might employ such tactics, he hadn't seen it elsewhere in the Australian tech ecosystem.
Strategic alignment emerges as the fundamental requirement. As Stephanie explained, financials are fundamental but not what drives the initial yes or no. Strategic alignment determines initial interest; financial considerations become crucial once strategic fit is established. The way REA thinks about financials is twofold: evaluating returns for REA and using projections as an indicator of where to spend time.
Unrealistic forecasts create particular problems. When founders present hockey stick projections that seem disconnected from their track record, it signals that valuation expectations will be misaligned. As Stephanie noted, "We've seen some crazy forecasts in our time." These unrealistic projections can deprioritise opportunities because they suggest the parties will be too far apart on valuation to have productive conversations.
The timeline reality check was sobering. Stephanie was candid: "I used to say that we were really fast at doing transactions and the reality is we're just not. We are a big corporate and we have stakeholders that we need to bring along the journey." Due diligence alone typically takes six to eight weeks, but total transaction time is minimum three months, often considerably longer.
Deals can collapse at various stages for different reasons. Early on, strategic misalignment or changing business unit priorities can kill opportunities. During due diligence, the reasons become more specific. Vlad shared a litany of potential deal breakers discovered during due diligence: technology platforms not built as expected, cyber incidents, tax issues with offshore contractors, and even unfortunate Christmas party incidents. As he summarised, there's "a plethora of things that could break the deal," though teams try to determine what's fixable versus what's a true deal breaker.
Partnerships often serve as stepping stones to deeper relationships. Stephanie explained that REA might start with a partnership to get to know a startup better, which can then transition into investment conversations once alignment is proven. This approach allows both parties to test the relationship with lower risk before committing to acquisition.
Vlad added another dimension to partnerships, noting they're particularly valuable when there's strategic interest but corporate development needs evidence before pursuing acquisition. Partnerships provide access to customers and allow participation in growth while validating whether full ownership makes sense.
Retention of talent and capability post-acquisition requires thoughtful structuring. Vlad explained that they typically prefer operating businesses standalone initially and retaining founders and teams. They love deals where founders want to continue, often structuring arrangements that balance immediate payment with longer-term incentives tied to performance.
Stephanie emphasised that corporate development professionals differentiate themselves from advisors by staying involved post-transaction. As she put it, "We sit on the company side because we like seeing a transaction through. We like seeing how it integrates into our business." This ongoing involvement ensures deals deliver on their promised value rather than just closing for the sake of closing.
The speakers offered specific, actionable advice for founders seeking corporate development attention. On initial outreach, Stephanie emphasised checking strategic alignment before reaching out. REA publishes investor day presentations every three years with detailed strategy information. If your business doesn't align with stated pillars, save everyone time by not reaching out.
For the conversation itself, preparation is crucial. As Stephanie noted, you've got about an hour of someone's time between ten other meetings that day. Make sure technology works, have a clear pitch, and avoid the small frustrations that derail meetings. Both speakers stressed the importance of seeing products in action rather than just discussing concepts.
The fear of corporate development should be calibrated to reality. As Alan Tsen noted from his experience on both sides of the table, there's much to be learned about how to interact effectively with corporates. The key is approaching these conversations as partnership explorations rather than adversarial negotiations.
Perhaps most importantly, timing matters. Vlad suggested that startups shouldn't wait until they're actively fundraising to build relationships. Early engagement, even just to get on the radar, can pay dividends when the time is right for a transaction.
This Cremorne Connect event exemplified CDH's mission to connect industry with innovators. As Alan explained in his introduction, having been on both sides as a founder and corporate accelerator leader, he's seen first-hand how much both sides can learn from each other. These conversations help demystify corporate development, making it more accessible to founders who might otherwise find it intimidating.