Understand Your Client so you can Better Understand the Deal

Many brokers, especially in the M&A space, are focused on so many things that they completely miss the boat on what or "Who" they are about to put something together with. Sure you always know "Who" the investment company is investing in but brokers seems to just want to close the deal and make money instead of really understanding the principal(s) in the company that will receive the capital and that is the first mistake. Rule #1, ALWAYS protect investors money, again, problem is the broker just wants to close the deal and make money looking away at probably the most important factor, the principal of the receiving company.
You could have an amazing deal or product and everything looks fantastic for this amazing deal to happen but as you are going thru conversations with all the principals in the deal you have to pay special attention to the principal of the company that will receive the capital. Again I am mainly referring to a merger or acquisition, investing money into a company.

If the principal of the receiving company keeps talking on and on and on and on... and is MOSTLY focused on the fact that they have heard so many stories of this one not working out or another one not working out and they get OCD on a paragraph one point whatever or paragraph two in the merger or acquisition docs which are pristine but they "Feel" if this or that happens or IF, IF, IF, IF then you need to step in and reevaluate completing this deal because this principal ONLY has themselves in mind and not the investing company OR the MOST important person or entity in the scenario which is.... THE INVESTOR and THEIR capital.

How do you know if you should kill the deal? These are a few steps, certainly not all steps but just a few. 1), Bring in a 3rd party that is not familiar with the deal and ask that person to start being on phone calls and attend meetings and get their feedback, 2) Hand the deal off entirely to someone else on your team and let them vet it out, 3) If the target company is REALLY great then apply both 1 and 2 and then as a team work on educating the principal on how the investor and investment recipient works (Although this probably is a waste of time in most cases but...) once you have done all these things you can go to #4), Tell them you will buy them out and that after a transitional period or even sooner and that they will not be needed any more or #5) Don't waste time and move on.

Don't waste time, TIME is something we all know that you can never get back. Look, there is a balance of not wasting time and wasting time because there are thousands of other great people and companies right behind this target company.  As i said #1 rule is always the #1 rule, ALWAYS protect the investors capital, ALWAYS and as a friend once told me "The key is to make a call right away and then act on it right away..." and unfortunately in most cases going right to #5, moving on, will most likely be your best option. Good luck! 

STOP!

Yes.. STOP! I speak to so many brokers every day and they are all going 1,000 MPH trying to pitch this deal or that deal and all they end up with is a lot of wasted energy and at the end of the day, week, month and year they have really nothing to show for it..... whew.

The problems are endless but the solutions are simple with the first solution is you need to get some education in the field or category of what it is your brokering. My gosh all you have to do is Google your category and you can read until the wee hours of the morning every day educating yourself on your products.

Next after you research and better understand what it is you're brokering and if you think you know everything about your product well then that is another clue that you need more education, YOU CAN NEVER LEARN ENOUGH about what you are working with.

Once you understand what it is you are brokering somewhat better then you can take the next step and start looking up principal companies that want or will capitalize the product that you have. This is where STOP! really comes in again because if you are on the phone with your buddy who says ya I know this guy and he knows that guy, or if you find someone on LinkedIn that says, hey I know this guy and so on then PUT ON THE BRAKES because it is a complete WASTE of time.

You need to again educate yourself on the principals that can act on and do something with your deal. Search for these principals on Google, research their websites, look some of the executives from the website up on LinkedIn, don't connect with them just learn about them and understand what it is they do AND what their process is for you to pitch your deal to them.

I can write for hours on this subject and will come back to it, but really, take a breath, stop calling all of your buddies who know this guy and that guy. be a PROFESSIONAL, study, learn and know your trade, research principals ONLY not other brokers and get deals done the right way, one step at a time and with great knowledge, the more knowledge you have the more powerful you will become in your deal flow broker trade. Good luck hope this helps.