This is a detailed view of our acquisition process. For more information about our acquisitions approach visit our acquisitions handbook.
Acquisitions deal flow
Below is the deal flow of the acquisitions process with estimated conversion rates and metrics for each stage we think there can be a drop point. At this point, the estimates are hypothetical and not based on actual deal flow data we've collected through our process. The flow aims to capture the success rate and volume of the acquisitions process for GitLab.
Potential target companies
Deal term fit
Code screen share
Founders technical interview
Resume review of all people
Optional step: sample interviews with non-founders (will increase LOI success rate)
Deal terms discussed and socialized
Review all code
Interview all people
The process is comprised of three key stages:
Intro call: we'll reach out to schedule a 50 minute introductory call. The purpose of the call is to:
Current state of your company including team, products, financials, and more
Review the expectations and process noted on this page
Start discussing which features could be built into gitlab
Discuss which GitLab product category the team could join as a whole
Answer questions your team may have Details from this call should be collected following the Initial Acquisition Review Template(a GitLab internal document). TARGET TEAM: Ahead of the product call please review our roadmap and outline which of your current and future product features can be implemented into GitLab's product categories. Outline a simple integration timeline for those features, considering an MVC release on the first month after joining GitLab and monthly releases following with quick iterations.
Create a new, private Slack channel for the acquisition team discussions. Format: #acq-company_name. Add VP Product Strategy and where relevant, the relevant product category director/s to newly created Slack channel.
Add template WIP Business Case to the top of the acquisition gdoc and start filling the details
Product call/s: start product diligence and deep dive into the discussion of which features could be built into GitLab and into which GitLab product stage. Discuss strategy fit to GitLab's product roadmap.
Internal review: validate potential fit for the team within GitLab and the integration options into GitLab
Preliminary financial & legal diligence - list of preliminary documents to share with GitLab:
Employee roster with: employee name, title, role, tenure, years of experience, location, salary, LinkedIn profile, programming languages proficiency
Employee Résumés and/or LinkedIn profiles
Employee agreements and PIAA
Customer list with name, monthly revenue, contract termination date and any other fields if relevant.
Vendor list with monthly spend
Any assets that are needed for the business and will be part of the acquisition
Assets excluded from the acquisition
Early technical diligence:
In case the target company has open source components, the respective Dir. Engineering (dependent on GitLab stage) will start an early code review to determine: code quality, development practices, contributions and more. That should be turned around within 2-3 business days.
Hands-on product and code screen-share session (2 hours): the technical lead, as assigned by the respective Dir. Engineering, together with the respective Dir. Product will lead a screen-share session aimed at a hands-on validation of the product functionalities and an overview of the code.
Founder technical interviews - founders will go through two rounds of interviews to assess technical and cultural alignment.
Résumé review - Review of all employee résumés
Optional interviews for a sample of the technical employees - to increase the success rate of the deal post-LOI we recommend conducting interviews for a sample of the technical employees before we sign the LOI. This will reduce the element of uncovering gaps during the diligence stage. The interviews will include a technical interview and a manager interview as detailed in the diligence stage below.
Business case stage
Product integration strategy: the lead PM will formalize the integration strategy with a focus on feature sets/functionalities:
1. Lead financial diligence 1. Validate business case and deal structure
1. Review entity, assets and existing agreements 1. Evaluate sunset and customer transition path
1. LOI 1. Acquisition agreement
Acquisitions are confidential
At GitLab, we treat acquisitions as confidential and we share the work on them on a need-to-know basis. If you're part of an acquisition Slack channel, GDoc or other internal GitLab discussion and would like to invite another GitLab team-member to one of those, please confirm with the acquisition lead before doing so.