How Hootsuite Structures its Corporate Development Team for Acquisition-Led Growth

Stefan Palios

Growth via acquisition requires a lot of components, best guided by an internal corporate development team. Richard Hungerford knows this system well, both as a founder whose company was acquired and now as the VP of Corporate Development at Hootsuite. Speaking with TechExit, Richard shared how Hootsuite structures its corporate development team.

Key takeaways:

  • Growth via acquisition should be in service of technology, new revenue, or building the team strategically.
  • Corporate development teams need to map the market first then treat reaching out like a traditional sales process with a CRM to document everything.
  • Acquisitions should be analyzed in the context of how it helps the company reach its 3-5 year goals.

On top of organic growth, Hootsuite grows through acquisitions and has made multiple purchases over the years depending on its needs and market availability. A key part of any successful acquisition, though, is the team behind it. Hootsuite is no different.

Speaking with TechExit, Richard Hungerford, the VP of Corporate Development at Hootsuite, explained how the corporate development team is structured to find startups, build valuable relationships, and integrate new acquisitions into the company.

Why Hootsuite leverages acquisitions

Any company with a growth-via-acquisition strategy is doing it for one of three reasons, said Richard: accelerating technology roadmaps, acquiring new revenue, or acqui-hiring a team. In Hootsuite’s case, Richard said the company is always on the lookout for all three rather than focusing solely on one element.

Richard explained that both the software world and the social media world evolve quickly, so at any time there might be a great company to acquire for tech, revenue, or team purposes.

However, it’s not done haphazardly. Instead, Richard said acquisition strategy starts at the product roadmap stage and builds from there.

“We work closely with product leaders on a build, buy, or partner roadmap,” said Richard. “We have a strong pipeline of things we want to build plus adjacent things we might like to buy rather than dedicate our limited resources to it. However, it has to be the right target because we only do one to two deals per year on average.”

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Structuring the corporate development team

Richard doesn’t break the team into departments because there are only four people to do all the work. Instead, he breaks the work down into functions that everyone helps with according to their strengths and company needs.

1. Market mapping: Richard said the team is always looking at the market for social media and adjacent softwares. This involves looking both at Hootsuite’s direct competitors but also other areas that the company may want to play in (for example, cybersecurity is an increasingly big consideration for Hootsuite customers, said Richard).

“We aim to get a very comprehensive view of different markets so we can assess whether it’s a space we’d like to play in,” said Richard.

2. Company targeting and pipeline building: With spaces identified, the team takes a warm and cold approach to reaching out to companies.

On the cold side, Richard said the team acts like a traditional sales team with cold calling, LinkedIn DMs, or emailing.

On the warm side, Richard said the team may receive introductions from investors, reach outs from companies looking to be acquired directly or via investment bankers, or possibly acquiring partners from Hootsuite’s ecosystem (for instance, LiftMetrix).

All reach outs are tracked within a CRM on the corporate development team to ensure that nothing falls through the cracks.

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3. Due diligence, negotiations, and purchase: If the corporate development team is confident an acquisition would help the company’s roadmap, it goes into due diligence and contract negotiations. This is where Richard breaks away from the everyone-helps-out rule and brings in lawyers and other financial specialists to aid in this step.

4. Post-acquisition operations: Richard’s team focuses on pre-acquisition operations, but they work closely with the post-acquisition team. This team, said Richard, is focused on ensuring both that the new team integrates well into the culture of Hootsuite (while maintaining some of their own independence) but also that the technological roadmap is decided whether that’s a full integration, partial integration, or leaving the platform to operate at arm’s length.

“First and foremost, we want to make sure the new team feels connected,” said Richard. “Even seemingly little things like making sure everyone’s on the right Slack channels goes a long way. Then we think about their daily routines and how they can maintain what makes them unique and happy after becoming part of Hootsuite.”

M&A is a five-year plan accelerant

The final thought that guides Richard in his work is timeline. Acquisitions, he said, are great for short term boosts (including some public relations as major tech outlets like covering acquisition news). However, the real benefit is in the three to five year plan. That’s how Richard focuses his efforts: ensuring that the work he does today will help accelerate the five year plan for Hootsuite’s growth and customer offerings.

“Acquisitions can help accelerate a lot of things,” said Richard. “But it has to be thought of in 3-5 year goals and how M&A helps achieve them.”