279 DealQuest - Episode 10 Remaster - FINAL AUDIO
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Corey Kupfer: [00:00:00] Do you want your business to grow faster? Are you open to new and out of the box ways to drive revenues and increase value? How do you imagine the most successful entrepreneurs and business leaders double, triple, or expand their businesses tenfold or more? This is a weekly podcast featuring conversations with business owners, executives, and leaders.
As we reveal behind the scenes details that give you, our listeners, the confidence to pursue your own deal driven growth on the show. We discuss a huge variety of deals, everything from large. Complex mergers and acquisitions, capital raising, joint ventures, strategic alliances, real estate, affiliate and sponsorship deals, and more, including smaller deals that you can do without significant capital.
My name is Corey Kupfer, and I've been supporting deal driven growth for businesses for over 35 years as a successful entrepreneur, professional negotiator, and attorney. My goal is to help you strategize, plan for, find, and complete deals that will help your company grow [00:01:00] faster. Welcome to the DealQuest podcast.
Let's get started. DealQuest community. I'm so excited to introduce you to a remastered episode of the DealQuest podcast. The podcast has grown so much. We started it about five years ago now, at least at the point I'm recording this. In the beginning had maybe 60 or 80 listeners per episode. We now have many multiples of that.
In fact, we've got almost a hundred times that. And I realized that there were so many great interviews I did early on in the podcast. In fact, in the first year of the podcast. It wasn't even called a deal quest. It was called fueling deals until we rebranded it. And we interviewed some amazing, amazing entrepreneurs and deal makers and just amazing stories, amazing content.
And I know that so many of our listeners have joined us over the last several years and may not have heard some of those earlier episodes from five years ago, four years ago, even three years ago. So we have picked the best of the best of those old episodes. And the advice and the stories and [00:02:00] the experiences are timeless.
So we've remastered them, made sure the audio is great and put in our new intro and outro and that kind of stuff. And we're going to be re releasing some of these amazing, amazing episodes. So look out for them from time to time. And here's one coming up right now. So this is a solo cast, and I want to talk on this solo cast about a few themes that have come out of deals that I've done and negotiated and done for clients recently.
So the themes I want to talk about are the following. Patience, pacing, questions, and keeping relationship. And then there's, in that, there's another piece of the conversation called how to deal with the comments like it's always been done that way or nobody's ever asked for that. So over the last number of deals that we've done over a period of time, some of these things have come up and one of the things that I find is the conversation of patience is really, really interesting, especially in a dispute, potential dispute or dispute related situation.[00:03:00]
There's often an impatience with clients on getting things done. They're upset about the situation or it's a distraction. It's challenging and it's natural to want to just get it over with. And it's also natural, especially when you feel you're right, to just say, Hey, this is, just put it out there and tell them this is it.
And one of the things I really want to talk about is the value of patience. There's one situation, and this has actually happened in many, but there's one situation over the last six months or a year where I felt myself constantly actually slowing down the pace with the client. And in the beginning, I think they were getting a little frustrated about it, honestly, because they had a clear view.
And frankly, it's part of it involved interpreting. What a particular provision of an agreement said and what they were entitled to under it. And they felt their reading was right. By the way, I agreed with that. I think that definitely was right. But as opposed to just going forward and making a demand and saying this is what that provision says This is what you owe the person Instead, what I did was I just asked for their interpretation, the other side's interpretation of it.
And then what their offer was based [00:04:00] upon that. So first of all, we got them to put something on the table before we took a position. Then I asked a bunch of follow up questions, like, how did you calculate that? And what does this part of the provision mean? And really what that does is. It allows you to gather information and allows you to get a deeper understanding and allows you to design a strategy that's going to be much more effective than if you just made a bunch of demands and the other side denied them or made a counteroffer.
And too many people jump in negotiations to offer counteroffer, offer counteroffer without setting a context, without asking questions, without listening and, and using the value also of being patient. Now, that takes longer because when you're asking questions, they may take a couple of few days to respond.
They may not fully respond, which is often what happens, and you got to ask follow up questions. So it's so easy to want to shortcut that process, but I, I recommend resisting the temptation to do that. The second piece that I wanted to talk about, which is related, it's not totally the same thing. It [00:05:00] has more meanings, but it.
plays off of patience, which is pacing. And one of the things that I always say is that a deal, every deal has its own pace. And if you artificially pace, force the pace forward too quickly, you're in trouble. And if you artificially slow down the pace too much, you're in trouble. So on the latter, if, if a deal has a certain momentum, And you slow it down a lot, you're not responsive, or you're worried about something, or you're not in communication.
The other side is going to wonder whether you're, how interested you are in the deal. Is there a problem? They might start looking at other alternatives. They may lose their momentum and just lose interest, or what questions may come up in their mind that get them worried. You want to be careful of that.
And at the same time, and this relates to the patient's conversation and negotiations, if you artificially push the pace of a deal, whether it's because you're too anxious and you want to just get to a resolution or there, obviously there could be underlying business reasons why you need the deal to move at a certain pace.
But frankly, if you expose those and let [00:06:00] the other side know you're at a disadvantage and it's better to try to find ways to temper those or deal with the issues you're dealing with, you have to artificially push the pace of a negotiation. Unless those certain stances have you absolutely have to do a deal, in which case you should know, then you're probably sacrificing some, something in the deal terms, something in the pricing, something in the negotiating, if you need to do that.
The conversation of knowing that there's a pace to a deal and trusting the pace and being comfortable with it is something that comes with experience in doing more and more deals and being a better and better negotiator. And it's frankly one of the reasons why, you know, listen, there are certain deals that You as a business person should negotiate directly.
And sometimes I recommend to the client, no, no, you should deal with that directly. Don't get me involved. It's either going to escalate the situation because you're getting a lawyer involved or whatever. But very often there are also situations in which it pays to have somebody, whether it's an attorney or a professional negotiator like I am or someone else to come in and, because they, we've done so many deals that [00:07:00] we understand the conversation of pacing.
We feel the way, the flow of the deal. And we use that to our advantages as opposed to artificially accelerating it or slowing it down and therefore reducing the chances of a good deal coming. The next thing I talked about is questions. And that's, I alluded to this a little bit in the patient's conversation and talking about how I would ask questions about how, in that example, the other side interpreted that provision and what they think would be due under it, things like that.
Questions are such a huge advantage and they're underutilized. People tend to want to get their position out on the table. They want to make an argument. They want to put, uh, forth what they believe, why they're right. And the, the ability to ask questions and fully listen to an answer, even if you disagree with it.
is hugely important because those questions do give you information. They do, uh, if you do it, you come across as you should be, honestly, as caring [00:08:00] about what the other, the concerns of the other side are, of what they are worried about, of what is important to them. Because if you can understand that, first of all, if they feel that way, then they're going to continue, be more likely to continue in the dialogue and move the deal forward, than if they feel that you really don't care about what's important to them.
Second of all, like I said, they're going to give you information that's going to be useful. And third of all, that information gives you the opportunity to fulfill the needs and things that are important to them as long as they don't conflict through what's important to you. So sometimes you don't realize what's important to someone else, and that could be a big give on your side or trade off or concession in negotiation in exchange for something else or just to build goodwill because it may not matter to you.
You couldn't give it if you didn't Ask the right questions. Try to determine what they wanted and what was important to them and what they're interested in. Use questions and you see how these relate together, right? Because if you don't have patience, you're gonna push to pace. If you don't have patience, you're probably not gonna be willing to ask a [00:09:00] lot of questions and wait for answers.
You're gonna just be putting forth positions. If you don't understand pay pacing, then you may get impatient. Whereas maybe you weren't, you were patient in the beginning, but then it seems like it's taken too long and you don't understand the conversation pacing. And if you really understood the conversation pacing, you would understand it's all going on at the exact right pace.
And then if you're not asking questions, then your odds of having a successful negotiating negotiation and getting a deal done go down. And obviously if things have fallen apart, you're much less likely to be patient and trust the pacing. They're all related to each other. And they. Come up for me in specific situations, and I use this, this tactic all the time.
And in the situations I'm thinking of recently, we've gotten really good results for the clients by doing this. In fact, on a couple of situations that were way beyond what the client expected, because there was a way, I remember the client said to me on one of them that there was a way that it was like a chess game you were playing, Corey.
And as a way you set them into different positions and then back them, not into a corner, cause that's a bad thing. If you [00:10:00] back somebody into a corner, they're probably going to lash out. But you, you lock them into a position, you back them into a logical, uh, series of events and conversations that had them be in a very difficult position to basically turn down our view once we were then able to put it, we put it out there because you had established a chain of logic that led exactly to what we were about to say.
And in one case, there was a situation where. And there was similar language in another provision that cut the other way. And if the interpretation, the other side would have had a better vision that was applicable to my client, would have hurt them significantly. And if the other provision was applicable and I knew the other provision was applicable to other people, I said to them, Hey, listen, if I think your interpretation is wrong, by the way, if your interpretation.
Is X here, it needs to be X in this other provision. I'm sure that you don't want that to happen in those circumstances and that helped win the day. Yeah. Keep that in mind when you're approaching things and when [00:11:00] you're, whether you're handling the negotiations and the deal yourself or whether you are hiring a professional to do that.
Obviously, you want your professionals to be responsible to you. You want to make sure they're on top of it, they're moving the deal forward. They're not getting in the way, but also it's productive for your results if you have the right person, if you are trying to pressure them to move things forward at a pace that's not appropriate to get your results.
And I'm always willing to push back to a client to say, Hey, listen, I know you're anxious, breathe, calm down here, trust me. And here's why I'm doing it this way. So yeah, I think it's something to seriously consider. Let's take a break from the show for a minute so I can tell you about an incredible resource my team and I have put together for you.
Secrets of deal driven growth, creative ways to grow your business, even in challenging times. There's a powerful ebook that helps you take DealQuest podcast episodes and apply them to your own life and business. This is the ideal tool for anyone looking for creative ways to grow as deal [00:12:00] makers. And you can get yours today.
Now, it's as easy as heading to Cory Kupfer dot com slash workbook and downloading your cup while you're there. You can also consider joining our dynamic deal driven community of founders, experts, small business owners, and entrepreneurs. Now back for the show. The other piece I want to talk about is this conversation of how you respond to certain things they say in a negotiation and also how it relates to, um, keeping relationship and why it's important to keep and build relationship even with, uh, somebody on the other side of the table.
Whether that's the principal or whether it's their attorney or the negotiator. We had, this comes up a lot, but I had a particular situation somewhat recently where a couple of statements came up that I've seen before and never swayed a day for me, but they're usually used to try to shut down a conversation.
And that is, we've always done it that way, or nobody else has asked for that. I remember, I'm going to go back many years ago, in fact, decades ago. [00:13:00] Where I was actually a young associate. I was, so we're going back a long time, folks. This is probably actually almost 30 years ago. As I think about it, I was, I was a young associate and we were doing these mortgage backed securities deals.
So they were very, very complicated deals. They were actually some of the early versions, frankly. of some of the deals that ran into trouble in 2008 9, but the deals as they were done back, a while back were much safer for a variety of reasons I won't get into. But they were super complicated. Even the deals back then, which weren't as complicated as the deals they have now, had hundreds and hundreds of pages of agreements.
I remember there was something called the Pooling and Servicing Agreement. That document alone was 180 pages and had 40 pages of defined terms. 40 pages of defined terms. And of course they all were interrelated. So they were very tough to understand. But as a young associate, I made it my business to figure these things out and understand them and really understand how the document flows, flow because those deals were big at that time.
And I said, first of all, it's just the way I operate. I can't, even as a young [00:14:00] associate, when I had partners above me, I couldn't operate where I was working on a deal I didn't fully understand and it didn't serve the client. I remember back then, there were a number of things that didn't work in the documents.
These were documents drafted by a major law firm. In, in New York City, they were actually the ones when Wall Street came up with this vehicle, they were the law firm that created the legal documents to affect those deals. And they were experts. They were, it was a very good firm, but, and they had done deals under these documents for about a year.
They'd probably done 20 or 30 deals already. And I came in, this little kid, I start raising these issues with the documents, about a dozen of them, about three or four of which was significant. The others were smaller. And I had raised them in a prior call with one of the associates, my level. And that associate just said to me, that's the way it's, we always do it.
We're the ones who, the partner that I work for drafted these documents. They got it. They basically have to be right. It was clear to me that he didn't understand the documents. Which was not unusual, frankly, there were plenty of people working on that deal on the investment banking side and on the legal side who didn't fully understand the docs.
I [00:15:00] brought it up the line and it ended up on an all parties conference call with the senior partner at my firm, at their firm, and the senior partner at my firm strikingly looking at me like, I'm crazy, what are you doing? Because between us on this podcast here, I don't think he fully understood the documents.
And fortunately for me in that case, the senior partner at the major law firm in New York City, Not only did he fully understand the documents he wrote, but he was also a guy who was confident enough in himself and that even in front of his clients, he was willing to say, Corey, I think you might be right on that.
Let us look into that. I think you might have a good point there. And he used that as an opportunity to improve his documents, and I turned out to be right. The point of this, relaying this story, is not to show you, wow, look at Corey. It's that the pushback I got from the initial associate, in a subsequent call with the senior associate, and initially on the call with the senior partner was, We've that's the way we've done it.
It's nobody's ever raised that. It's not been a problem in our other deals. That's never an acceptable answer to me. More recently, I had that come up on something that my clients wanted. And listen, I rep, [00:16:00] who's representing clients who had a leverage. They were a very significant partner of this particular platform and, and they had some leverage.
So there were things they were pushing for. on a business level that other people didn't get and they got them. And then there was some legal comments and there's this interesting distinction between business comments and legal comments and how the business people deal with business comments, the lawyers deal with legal comments.
There's some truth to that, but there's also, it's overplayed because legal comments, quote unquote, can become business comments, right? If there's bad language in an indemnity, an overbought indemnity provision, that can cost the client a lot of money. You don't think that becomes a business issue? Or, there's a language regarding the division of duties between the parties that the language may be legal language, but the business issue is who's responsible for what.
We were down to the wire. We've been negotiating this deal for some weeks. It was going to close the next day. The other side was under pressure. They had several deals closing. We had three deals closing. They had a bunch of deals closing. So it's [00:17:00] easy to want to get things done. And at some point during the conversation, I heard nobody's ever asked that before.
And my response was that's irrelevant to me. And it was slightly testy, not seriously, but it was sort of like, but he was trying to shut down the conversation. Uh, and the implication in nobody's ever asked that before is either that you're, you don't understand it, or you're asking for something that's overreaching.
And they're just trying to shut it down. I pushed back. I said, that doesn't matter to me. I said, listen, this is the reasons we needed, et cetera. Now we ended up getting what we wanted. We worked out some language that was important to the client. And we did a little back and forth. We ended up getting what we wanted, which was great.
But one thing I did, and this, this ties into the last piece of what I said, I would talk about here, which is the keeping relationship piece. After we got off that phone call, after there were a few pushbacks, that's the exchanges, not like anything serious, there's a. level of respect. They were great attorneys.
We had worked together to move this deal significantly forward. It's just that there were some points of contention. And when you get [00:18:00] down to the last item, sometimes it gets tough. So after that all parties conference call, when I say all parties, I'm talking about all my clients were on, there were four different, five different executives from the other side.
There were several lawyers on both sides. After I hung up the phone on that, I actually called the senior partner of the other law firm directly. I said, Hey, listen, I just wanted to touch base one on one. I know we had some back and forth on the call and I know there was some pushback there. And I understand that you're, you want to get this deal done and you got some other stuff going on.
You're under pressure, but yeah, this stuff's important to my client and no disrespect intended. I need to represent the client. And he said, listen, I fully understand. He apologized for being short with me. He said, we got a lot going on, which is, I knew it was the case. Now, why did I do that? Why did I do that?
Is it because I care that somebody's going to like me? No, it wasn't that. I did that because, first of all, I think just my approach of working with other lawyers, other negotiators, and that's what they [00:19:00] are, is that, especially the good ones, is that I respect them. I respect their position. I respect that they have to represent their clients.
And it's not personal, right? Clients don't hire me to make it personal. They hire me, and any good lawyer or paid negotiator or dealmaker or investment banker should be hired because they can achieve the client's goals and be objective. Second of all, though, I know that that lawyer has influence over his client.
And listen, we're all human. And although the client's going to represent, the lawyer's going to represent that client in their best interest, How they advise the client on how much of a big deal this is. Or whether they can work out language or how much they should push back or not push back on it is influenced by their emotional state and how they're feeling at the moment.
And so if they're in a place of upset or anger or they're in a place that, you know, that they don't like me or whatever it is. It can affect their advice to their client, which could adversely [00:20:00] affect my client. One of the things I'm doing there is to cool the situation, try to build. And we had a lot of rapport and a lot of us, we'd done a lot.
So it wasn't even building rapport, it was just reconnecting to that rapport and all the good work we had done together. But reiterating that we were going to get this done and to work together to get it done and take some of the heat off of these last few issues so that we could get them to conclusion in a way that worked for my client and ultimately worked for his client as well.
That's just an example of how keeping relationship. In a, with the other side really makes sense. Now listen, if somebody's really doing something manipulative or improper or whatever, I'm not saying you're always gonna, sometimes you just want to remain taught. But if things just get a little testy, a little pushback, or people are getting frustrated, that's something to keep in mind because it makes a difference.
We've talked about patience, pacing, questions, how to deal with some of the sort of standard responses. Now, keeping a relationship, those are a few of many things that it takes to not [00:21:00] only negotiate well, but get a deal done and understand how to get a deal done. And we'll be talking about some of the other ones on other podcasts in the future, but these two are just triggered for me out of some recent deals that we did.
Had me thinking about it. I hope this, uh, gives you some things to think about. Thank you for joining me on this episode of deal quest, where we help you understand how deal driven growth can be your ticket to freedom. I want to invite you to a unique way to tap into the wisdom and experience of the deal quest community.
The deal den is a place where entrepreneurs, high level executives and business leaders come together, support each other's growth and success and share what's working best as well as what challenges we are facing right now. You will get input, not only from me. But from all of our members, we collaborate and serve each other to join us.
Go to Corey cut up for. com slash deal day. I'll see you there. I'm Corey Kupfer until next week, wishing you the freedom and financial prosperity that I know [00:22:00] your deal quest will bring.
