"Entrepreneurs underestimate how important chemistry is in an acquisition"
Idan Tendler, senior vice president at Palo Alto Networks, was speaking on a panel on mergers and acquisitions, held at Calcalist's InvesTech conference held in collaboration with IBI Capital. "At the end of the day, you're sitting in a room with the buyer, and there has to be a connection—you can't force that," he added.
Mergers and acquisitions may seem like a wedding, but industry leaders argue they are more like an organ transplant—fraught with challenges and uncertainty. Executives from Dell Technologies Capital, Palo Alto Networks, Fiverr, and Meitar Law Firm discuss the critical role of the human factor in deal success, the importance of early relationship-building, and how companies can navigate post-acquisition integration. As market conditions evolve, Israeli entrepreneurs remain central to global tech deals, particularly in cybersecurity.
At what stage of a project should one consider the human factor?
Yair Snir, Managing Partner, Dell Technologies Capital: "I view mergers and acquisitions differently. To me, they are more comparable to an organ transplant than a wedding. When a company acquires another, it is often a last resort to achieve a strategic goal. The critical question is whether the body—the acquiring company—will accept the implant or reject it. Statistically, rejection happens often. The human factor plays a fundamental role.
"When entrepreneurs establish a company, they define its identity, including knowing who their competitors are and who might be potential partners or future buyers. It's not about planning to sell the company tomorrow, but about building relationships early. Whether an acquisition happens depends on many factors aligning, but it should be part of a company's long-term strategic thinking."
Idan Tendler, Senior Vice President, Palo Alto Networks: "On the one hand, I agree—you must understand the competitive landscape from day one. But I often meet young entrepreneurs who ask what they need to do to get acquired. My answer is always the same: 'Bring in sales.' If you want to be acquired, focus on excelling as a business. Customers drive acquisitions."
Buyer or seller: Which side is more exciting?
Ofer Katz, CFO, Fiverr: "I've been on both sides multiple times. Being acquired is more exciting—it's a major milestone, a stamp of excellence, and the start of a new journey. On the other hand, for the buyer, the acquisition is just the beginning of an almost impossible journey. I also think of it as an organ transplant—two companies with different DNA trying to integrate. It's complex and requires significant effort and luck."
What’s your top advice for buyers?
Talya Gerstler, Partner, Meitar Law Firm: "Being on both the buyer and seller sides gives you a full-circle perspective. The beginning of an acquisition can feel like a wedding, but it often turns into something much more complicated—like an organ transplant.
"Buyers bring legal, technological, and strategic considerations into the deal, but setbacks occur when they are unprepared. From a legal standpoint, issues like intellectual property (IP) and regulations must be carefully considered. This is why sellers must prepare early—during company formation and fundraising—to avoid surprises later on."
Tendler adds: "Entrepreneurs underestimate how important chemistry is in an acquisition. At the end of the day, you're sitting in a room with the buyer, and there has to be a connection—you can't force that. After the deal, everything changes. As a CEO, you're used to making decisions, even about something as simple as what to eat for lunch. But once you're part of a bigger organization, those decisions aren't yours anymore. If you're selling your company, don’t expect to dictate its future direction afterward."
Can a company’s DNA be adjusted to ensure a successful deal?
Snir: "The success of an acquisition has two phases: first, getting the deal done, and second, ensuring the company thrives in its new structure. The post-acquisition phase is crucial. The more planning that goes into integrating both sides and allowing space for adaptation, the smoother the process will be. While the acquired company is often in a more vulnerable position, it's a challenging adjustment for both parties. A well-thought-out transition plan increases the chances of success."
Katz: "When acquiring a company, the goal is not to force the team to fit into the buyer’s DNA. There’s immense value in the differences—the fresh perspectives, the entrepreneurial mindset, and the ability to break into new markets. One of the worst mistakes is pushing an acquired company into the acquiring company’s bureaucratic structure. Instead, the focus should be on nurturing what made the startup successful in the first place."
How will market conditions impact deals in the coming year?
Katz: "We’ve had better years, but I firmly believe that the money, technology, and entrepreneurial spirit are still there. I’m optimistic about the year ahead. Investors and buyers are actively looking for innovative technologies and strong teams. While geopolitics plays a role, the demand for new technologies remains high."
Tendler: "I'm optimistic as well. Despite the challenges of the past two years, high-tech is here to stay. We've seen new unicorns emerge and many acquisitions take place. The world recognizes the strength of Israeli entrepreneurs and technologies, especially in cyber. The volume of cyber acquisitions in recent years proves that Israeli high-tech will continue to play a central role on the global stage."
