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Last week I promised a few thoughts on cultivating deal flow.
I’m back after some time helping my wife with her art businesses, so the time is now!
How to make deal flow like:
I’m back after some time helping my wife with her art businesses, so the time is now!
How to make deal flow like:
1. Deal flow is a balance between active selling and sitting on your hands.
Who do you “sell” too? Everyone, but especially the “professional set” who are touching a lot of potential targets. For me: bankers, lawyers, accountants, etc
Who do you “sell” too? Everyone, but especially the “professional set” who are touching a lot of potential targets. For me: bankers, lawyers, accountants, etc
2. Take them to lunch (I know...) - pay for the lunch. Build a relationship. This isn’t a “one and done” thing. Go regularly.
Every city has a handful of people that “control” the deal flow in your industry/target market in that city. You have to find a way in...
Every city has a handful of people that “control” the deal flow in your industry/target market in that city. You have to find a way in...
3. Shut Up and Listen. You are buying them lunch because they know a bunch of people that you’d like to talk too. Be quiet and learn. Ask questions. Understand what they do and why.
How can you help?
How can you help?
4. Be Concise - Know Your Competitive Advantage
Prep by working on your elevator pitch. Why should they remember you?
Mine?
1. Check Size
2. Speed (I’m the investment committee)
3. Debt (no equity/warrants)
They aren’t going to keep even your 1-pager around. That goes...
Prep by working on your elevator pitch. Why should they remember you?
Mine?
1. Check Size
2. Speed (I’m the investment committee)
3. Debt (no equity/warrants)
They aren’t going to keep even your 1-pager around. That goes...
5. Know Your Competition - What kind of deals should go to your competition, and what kind of deals should come to you?
Be generous/kind - Learn the phrase, “That isn’t the right deal for me. Here’s why ...” AND “_______ might be helpful. I’m happy to make an intro”
Be generous/kind - Learn the phrase, “That isn’t the right deal for me. Here’s why ...” AND “_______ might be helpful. I’m happy to make an intro”
6. “Who Else Should I Know?” One of the real magical questions in the English language. Arrange to go meet them if they are in a different city than your own.
7. Take Your New Friends to Lunch, Again. They remember you, and like you. However, they don’t remember exactly what you’re looking for. Be generous, and repeat.
Have there been any changes? Any evolution in your thinking?
What does a typical customer look like?
Have there been any changes? Any evolution in your thinking?
What does a typical customer look like?
8. I’m “Industry Agnostic” like most investors. Explain what that means to you. For me:
I’m open to learning new things, but I’m not that smart so I need to be able to understand it. Ie no biotech. Also, no mezz on real estate
Give examples.
I’m open to learning new things, but I’m not that smart so I need to be able to understand it. Ie no biotech. Also, no mezz on real estate
Give examples.
9. Be Active On Twitter - put yourself out there. Be part of the community.
Thank You to all of you for your generosity to me over the last 4 or 5 months.
I love it!
Thank You to all of you for your generosity to me over the last 4 or 5 months.
I love it!
10. Deal Flow Is Lumpy - know the difference between this (normal) and not seeing deals (bad). If the latter, repeat the lunch circuit. Ask more questions. Expand your network.
There is NOT a natural law that says you get 1 good deal per unit of time.
You can’t push on a rope
There is NOT a natural law that says you get 1 good deal per unit of time.
You can’t push on a rope
11. Make Decisions Quickly/Give Clear Feedback - Be grateful and responsive to the person providing a potential deal. Don’t waste their time.
Information is what sharpens your future deal flow.
For me, I learned very early I wasn’t interested in a $250k deal to a machine shop
Information is what sharpens your future deal flow.
For me, I learned very early I wasn’t interested in a $250k deal to a machine shop
Final) If I’m not seeing deal flow, it’s most likely the problem is with me.
Is my offering still relevant?
Am I talking to the right people?
Do they remember what I’m looking for?
Mass marketing/cold calling doesn’t work in mezz lending.
I MUST remember: It’s a relationship
Is my offering still relevant?
Am I talking to the right people?
Do they remember what I’m looking for?
Mass marketing/cold calling doesn’t work in mezz lending.
I MUST remember: It’s a relationship
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