I'm a serial tech startup founder who has seen all sides of this up close. I've had startups I founded or co-founded IPO, be acquired by a Top 10 valley tech giant, acquire smaller startups, and (of course) go bust. I've self-funded, VC funded, angel funded and had corporate investors. In the acquisition, I ended up working for the Top 10 valley tech company for over a decade reporting directly to a key C-Suite exec and was deeply involved in company strategy, multi-billion dollar M&A, partnerships and investments.
In all that time I never saw any hint of anything even remotely unethical involving investments or M&A at my acquirer/employer. The company always played strictly by the rules, sometimes to an almost excessive degree (avoiding even the possible appearance of impropriety). This was both innately cultural, constantly preached from the BOD to CEO on down, as well as tactical since the reputational cost of negative perception was simply considered too high. Word gets around the valley fast. The invisible cost of the potential partner or startup that chooses to pass on meeting with us due to reputation could be very high.
That said, we would negotiate hard and do our due diligence, gathering public information in every legit way possible as we evaluated potential markets, product areas, acquisitions, partnerships and investments. Tons of startups were always contacting us to meet regarding investment, licensing, partnership, etc. So many that we'd actually meet with far less than 1 in 10, and even we'd usually just send a junior staffer to the mtg for a "first pass".
Those first mtgs were almost always set up as NNPI (No Non-Public Info). We'd actually have the startup sign a doc in advance stating that they wouldn't share anything with us that wasn't already public info. This was then re-iterated at the beginning of the mtg. Afterward the junior staffer would then circulate a brief memo on the mtg outlining if there were any areas of interest and recommending whether there should be any follow-up with actual business unit or tech people with domain expertise. Most such mtgs had no follow-up. In the cases where there was follow-up, before mtg again we'd internally specify what our possible interests were (acquisition, investment, partnership, etc) and if acquisition or investment we'd have at least a first-pass thesis on what our interest was, usually at the level of "interesting tech", "good talent", "cool product - might slot into XYZ product line."
Back when I was a fledgling startup founder on the other side of all this, it was sort of mysterious and I remember my first mtgs with Big Cos (including Google, Apple, Intel, Microsoft, etc). It was all very exciting until I realized that most of these 'first sniff' mtgs are with junior people and never go anywhere.
Even if my acquirer/employer was unique in being highly ethical, the reality is that any startup founder who isn't intensely aware of the risk of Big Co becoming a competitor is incredibly naive. If senior Big Co execs are taking time to meet with you (vs junior Big Co staffers), it's because they are interested in something. As a founder, your job is to figure out what why they are interested. Sometimes they are just making small investments to foster an ecosystem their primary business relies on. Or they might be interested in acqui-hiring your startup. Or they might be looking at moving into the emerging market you're in and doing a Build vs Buy analysis or even considering a roll-up of smaller firms. Or they might be looking at buying one of your competitors and doing market due diligence. As a Big Co exec, I'd usually just tell a startup founder point-blank what my interest was, as it tends to save everyone time.
Often the startup founders I'd talk to as a BigCo exec were actually too guarded, to the extent they'd hesitate to even informally have a 'get acquainted' drink at a conference or trade show. It's good to be cautious but at the same time, many of my most lucrative exits and deals began with such meetings. As a founder, I also often learned invaluable info from Big Co people at such informal mtgs. After all, Big Co folks tend to hear all the industry scuttle-butt and they actually subscribe to ALL those $10k market data reports us startup guys could never afford.
Bottom line: when engaging with Big Cos, ask good questions, rationally evaluate the benefits vs risks, plan for the worst and hope for the best.
Your particular experience does not mirror that of others.
The risk here isn't Big Co Exec. It's the aspiring PM who wants to make a name for themselves at the Big Co.
NDA's aren't worth the paper they are printed on; when it comes to that, you'll just discover that Big Co has retainers in place with all the law firms you'd want to work with.
Sure, that's why I said "Plan for the worst, hope for the best". It's always possible, even if mtg with an ethical company, the junior person you're meeting with that day could be a new-hire who's an idiot and tries to get actionable information.
NDAs aren't deterrents. At the same time, any secret that can be casually conveyed in a mtg, typically isn't all that valuable. If you have a strategic investor as an outside board member, a smart founder will ensure nothing disclosed in a board mtg or board materials is specific enough to be competitively actionable. If you do it correctly, they shouldn't gain any non-public info more specific than broad sales growth, and there are a lot of completely legal ways for interested Big Co competitors to get good intel on sales growth which are much cheaper and easier than investing.
That's why we generally passed on even evaluating most startup investments. They just weren't worth the time to manage plus if we really planned to be active in that space the legal exposure would require a formal "Chinese Wall" between our investment and our business unit, usually managed and audited by an outside law firm. If we were truly interested in the space, I'd always argue we should just acquire the startup now, buy one of their competitors or tilt up our own 'build it' version.
In all that time I never saw any hint of anything even remotely unethical involving investments or M&A at my acquirer/employer. The company always played strictly by the rules, sometimes to an almost excessive degree (avoiding even the possible appearance of impropriety). This was both innately cultural, constantly preached from the BOD to CEO on down, as well as tactical since the reputational cost of negative perception was simply considered too high. Word gets around the valley fast. The invisible cost of the potential partner or startup that chooses to pass on meeting with us due to reputation could be very high.
That said, we would negotiate hard and do our due diligence, gathering public information in every legit way possible as we evaluated potential markets, product areas, acquisitions, partnerships and investments. Tons of startups were always contacting us to meet regarding investment, licensing, partnership, etc. So many that we'd actually meet with far less than 1 in 10, and even we'd usually just send a junior staffer to the mtg for a "first pass".
Those first mtgs were almost always set up as NNPI (No Non-Public Info). We'd actually have the startup sign a doc in advance stating that they wouldn't share anything with us that wasn't already public info. This was then re-iterated at the beginning of the mtg. Afterward the junior staffer would then circulate a brief memo on the mtg outlining if there were any areas of interest and recommending whether there should be any follow-up with actual business unit or tech people with domain expertise. Most such mtgs had no follow-up. In the cases where there was follow-up, before mtg again we'd internally specify what our possible interests were (acquisition, investment, partnership, etc) and if acquisition or investment we'd have at least a first-pass thesis on what our interest was, usually at the level of "interesting tech", "good talent", "cool product - might slot into XYZ product line."
Back when I was a fledgling startup founder on the other side of all this, it was sort of mysterious and I remember my first mtgs with Big Cos (including Google, Apple, Intel, Microsoft, etc). It was all very exciting until I realized that most of these 'first sniff' mtgs are with junior people and never go anywhere.
Even if my acquirer/employer was unique in being highly ethical, the reality is that any startup founder who isn't intensely aware of the risk of Big Co becoming a competitor is incredibly naive. If senior Big Co execs are taking time to meet with you (vs junior Big Co staffers), it's because they are interested in something. As a founder, your job is to figure out what why they are interested. Sometimes they are just making small investments to foster an ecosystem their primary business relies on. Or they might be interested in acqui-hiring your startup. Or they might be looking at moving into the emerging market you're in and doing a Build vs Buy analysis or even considering a roll-up of smaller firms. Or they might be looking at buying one of your competitors and doing market due diligence. As a Big Co exec, I'd usually just tell a startup founder point-blank what my interest was, as it tends to save everyone time.
Often the startup founders I'd talk to as a BigCo exec were actually too guarded, to the extent they'd hesitate to even informally have a 'get acquainted' drink at a conference or trade show. It's good to be cautious but at the same time, many of my most lucrative exits and deals began with such meetings. As a founder, I also often learned invaluable info from Big Co people at such informal mtgs. After all, Big Co folks tend to hear all the industry scuttle-butt and they actually subscribe to ALL those $10k market data reports us startup guys could never afford.
Bottom line: when engaging with Big Cos, ask good questions, rationally evaluate the benefits vs risks, plan for the worst and hope for the best.