by Scott Edward Walker on August 8th, 2021


Dear Founders:  It’s hard to do deals when you have little or no experience.  Indeed, no matter how much you read online or how much advice you get from others, you cannot develop the skill set needed to be an effective dealmaker without actually doing deals; that’s the hard truth. 

Nevertheless, I thought it would be helpful to share ten “golden” rules of dealmaking based upon my nearly 25 years of doing deals as a corporate lawyer.  Accordingly, whether you’re doing a financing or selling your startup, you should consider the following (in no particular order):


1)  Create a competitive environment.  Remember — if you’re only negotiating with one party, your only leverage is to walk. 

2)  Whoever wants the deal less has the most negotiating leverage; or put another way, the more anxious a party is to do the deal, the weaker his negotiating position.

3)  Your strongest leverage in any financing/sale is prior to the execution of an exclusivity letter — i.e., an LOI/term sheet which includes a “no shop” provision.

4)  Create a sense of urgency.  The longer the process (e.g., fundraising) or deal drags on, the less likely you will close.

5)  At the end of the day, it’s all business.  The investor’s/acquiror’s smooth talk and smiles pre-closing mean nothing.

6)  Try to deeply understand the interests/motivations of each player, including advisors.  For example, investment bankers only get paid if the deal closes.

7)  Your word must be your bond.  If the party on the other side of the table can’t trust you, he will typically walk.

8)  If there will be an ongoing relationship with the other party post-closing (e.g., a financing), you better diligence that party and get strong references from appropriate sources.

9)  The highest offer may not be the best offer; terms and people matter.

10)  Don’t count your chickens before they hatch.  In other words, the deal isn’t closed until the wire hits (not before).

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