We recently had a conversation with Shan Aggarwal, Head of Corporate Development at Coinbase, exploring his journey to where he is today, the importance of his professional relationships, and the future of M&A.
Tell us a bit about you, how you came to Coinbase, and what you’re up to there.
I’ve been with Coinbase for about two and a half years now. I run our Corporate Development and Coinbase Venture arms. Broadly speaking, I think about things related to mergers and acquisitions, product strategy, and venture investments in early-stage crypto and fintech startups.
Before Coinbase, I had spent a number of years working at a traditional venture firm, called Greycroft, where I mostly focused on early-stage investing and ended up looking at a lot of fintech companies, which ultimately led me to Coinbase. In early 2017, I noticed this movement of smart folks that I knew, either talking about, thinking about, or working in crypto. That really piqued my interest and allowed me to start peeling off the layers of crypto.
As I learned more about technology, the forward-looking use-cases that could be enabled by smart contract platforms really got me excited about crypto, and so I ultimately joined Coinbase.
Many people use Coinbase as front-end users to manage their cryptocurrency. For those unaware of the venture side, what does that look like?
For some high-level context, Coinbase was founded in 2012 and is now the largest regulated cryptocurrency brokerage, exchange, and custodian. The company’s just about over 1000 people globally. The mergers and acquisitions and investment activity is separate but in a similar vein. We have a fairly active M&A group where we’re looking to acquire businesses and fully integrate one or more of them into our Coinbase products. That’s typically to help drive acceleration in our existing product roadmap.
We’ve made over 15 acquisitions in the history of the company, with the vast majority since the start of 2018. Because crypto is still such a nascent and emerging industry, we notice there is lots of experimentation going on. New ideas, business models, and use cases that are being built using crypto and the technology that underpins it. While we can’t work on all of these different things, we want to ensure that 1) we’re supporting innovation in the space, 2) we’re aligning ourselves with some of the best entrepreneurs, and 3) that we’re staying up to speed on how some of these newer trends and categories emerge
How would you say your network development efforts play into your work? Specifically, coordinating and connecting with entrepreneurs and new projects?
From a network development perspective, my role is interesting in that it’s nearly equally split between external and internal facing. The external part usually includes interfacing with entrepreneurs and investors that are in our ecosystem. I was fortunate to build a good base network from my prior role at Greycroft and that’s translated well, helping me with everything from sourcing or hearing about new potential investments, getting in touch with new potential partners, or even finalizing and closing a deal.
It’s really crucial for me to keep stock of the network that I’ve developed over the course of my professional career. Then I have to figure out the right ways to keep engaged with that network, even as we’ve transitioned to this fully remote world.
Do you recall how that focus on your network became prevalent to you? Was it an instant moment or more gradual?
I would say it naturally happens over time. Especially earlier in my career at Greycroft, you’re kind of constantly looking for new investment opportunities and trying to identify new trends, hearing new perspectives, and looking at what people are working on.
Anything unique about your network in terms of sourcing, due diligence, or portfolio support?
We typically co-invest with other investors. So, having a network of like-minded investors who have different experiences, who have done different due-diligence before, is really helpful in order to compare perspectives and come to a shared answer from the collective.
There are definitely elements of the industry that have made networking more unique. If we rewind before COVID, I think crypto by nature tends to be a more global and decentralized industry. Naturally, I found myself building relationships with people that were located in other countries or worked in industries that weren’t directly focused in on crypto, but were still appealing.
What are your workflows for promoting your network? Do you have any systems or tools that you use?
I mostly use email, social media like LinkedIn and Twitter, and like to set recurring check-ins with folks where we have a lot of shared surface area.
What predictions do you have for the future of your industry and beyond?
That was one of the big things we used to talk about when I worked in venture in Los Angeles. Just by the sheer force of nature, everyone is now being forced to get comfortable making investments in a fully remote environment. One thing that I think we’ll see less of, is the concentration in terms of location for startups. Even after things go back to normal, I think it will really open up funding markets in places outside of just LA, New York, and San Francisco. There’s also going to be a shift towards digital, which you can see in the growth of e-commerce companies, digital payment companies, and companies that support e-commerce businesses.
Do you think that the remote shift will affect diligence efforts?
From an M&A perspective, it does. You’re really projecting out three to five years, so there are different business practices when you’re negotiating an M&A transaction across borders with someone in another country. Being able to spend time getting to know that person and meeting in person can be extremely helpful. It’s going to be increasingly difficult. Now I’m trying to think of new ways to build more of a human connection now than in the past.