The relationship lesson in Raine Group's deal for Code Advisors
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
"Don't burn bridges" might be the top takeaway from yesterday's news that The Raine Group has acquired Code Advisors, the tech and media M&A adviser whose repeat clients have included Spotify, Twitter and Vox Media.
The big picture: Code is the first acquisition in Raine's 14-year history, and reflects the New York-based firm's desire to deepen its Silicon Valley footprint, particularly in software.
Backstory: Code was formed in 2010 by Quincy Smith, Mike Marquez and Fred Davis.
- Davis left four years later to join Raine, in part to focus more on music industry deals within a larger platform (he once was an EVP at EMI Records, and his dad is legendary producer Clive Davis).
- It was a surprising split, but Davis kept in touch with his former colleagues and Code even worked alongside Raine on a few deals. About three years ago, Davis told Quincy Smith to begin paying attention to what was happening at Raine, which was expanding its media and entertainment business.
- Smith did just that, and last year began a series of Embarcadero walk-and-talks with Raine partner John Salter. Raine then invited Smith to a firm offsite, after which the merger was effectively sealed.
- "This was really masterminded by Fred years ago," Smith says. "If there was a deal cube here, he'd get it."
Zoom out: "We really don't have much overlap," says Salter, who explains that each firm tends to focus on a small number of core clients.
- The merger also will help Raine's booming sports business (e.g., WWE, Chelsea FC, Manchester United, etc.) leverage Code's software industry expertise.
The bottom line: "Things didn't work out with Fred at Code, but that doesn't mean there had to be bad blood," says Smith, who'll become a San Francisco-based partner with Raine. "Deals are all about relationships."
