Amazon is developing a reputation for poor deal etiquette. Specifically (as reported by the WSJ), Amazon is using intelligence gathered by its venture arm during deal due diligence to develop competitive offerings. Microsoft, Google, Walmart, Alibaba, Shopify and others will likely capture a percentage of venture and M&A deal flow that otherwise would have gone to Amazon.
One Bad Word Can Torpedo A Reputation
The WSJ covers the example of a machine learning company named DefinedCrowd that had a less than optimal experience with Amazon. It is difficult to recover from a poor reputation whether as a venture investor, strategic acquirer, investment banker or any capital markets participant. To young capital markets professionals we say that no deal regardless of prominence, compensation or any other reason is worth risking your or your firm’s good reputation. Entrepreneurs are a tight knit group and many have long memories. Word travels fast. Amazon absolutely will lose deal opportunities as a result.