Wednesday, November 02, 2005

Selling the Deal

Seth Levine’s post on why entrepreneurs shouldn’t view their initial meeting with a VC as a one-shot deal rang particularly true for me yesterday when I met with a company I’ve been trying to do a deal with for 6 months. So much of corporate development is creating relationships with likely targets, whether they be large companies with businesses or assets that may need to be spun off, or small ventures that could be rolled up one day. And when you make a call to pitch a particular deal idea, it’s highly likely that you’ll get some manner of “no”. Like an entrepreneur, the kind of “no” you get – and what you do with it – depends entirely on the relationships you can establish. The guys I met with yesterday have told me no several times, as have I to their counter-proposals, but we’ve continued to talk – amicably – about what could be done to meet both of our needs. The outcome of all this dialogue is that we have finally reached a deal that works.

Circumstances change, and a deal structure that doesn’t make sense to a seller today may make a world of sense in three months. Sure, I sometimes feel like the persistant salesperson. But by leaving the door open, by being proactive and calling just to check in, I greatly increase the chance of being in front of the deal when it finally makes sense. And it's not just timing and luck - those calls and dialogue build the trust and information exchange that can create a deal where it otherwise would not ever happen.

1 comment:

Zach Coelius said...

Great post. I think most people looking for funding forget that business is relationship driven. Though as an entrepreneur I can also understand the the drive to get things done yesterday can sometimes make every meeting seem like a zero sum game.

Keep up the good work.