The Cisco spin-in.

• Author: Kristic, James

From Doing Both by Inder Sidhu. Copyright 2010 by Cisco Systems Inc. Published by FT Press, a Pearson imprint (www.ftpress.com).

SINCE ITS EARLY DAYS, Cisco has always been poised to acquire the next great producer of disruptive technology. Cisco pursues disruptive innovation via external venturing, or spin-ins. A spin-in is similar to a traditional acquisition save for few notable differences. In a spin-in, Cisco makes an early-stage investment in a company in return for special considerations. These include the option to purchase the company if and when predetermined customer and sales milestones are met, and the right to provide management oversight, where appropriate. In some instances, Cisco will also transfer some key employees to the spin-in candidate and provide additional...