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Keep Pulling The String
June 28, 2021
By Howard Mann

“All the roads you regret for not going to the end represent the alternative lives you have missed!” – Mehmet Murat ildan

 

As the perfectly bound book slid out of the envelope, I noticed the stamped silver foil name of the prestigious investment bank that had sent it to me on the cover. I thought to myself, “Wow. This is the real deal. What am I doing?”

Just days earlier, the same investment bank had mailed me a cryptic letter explaining that they were representing a competitor that was looking to be acquired and, based on not much more information than that, would I be interested in signing a confidentiality agreement so they could send me the “book” they had prepared.

Curiosity fully piqued, I signed away.

Now it was here, 100+ pages all about a company that would cost $5-6 million dollars to acquire. Now, for some of you, that may not seem like a large number but, at that moment in time, my business was losing money, was surviving on a large bank credit line and had exactly zero dollars to put towards an acquisition of any size.

As I flipped through the pages, a story unfolded of a company that was an incredible match for the short and long-term strategy of my business. Their offices all overlapped where I had offices and many other synergies. But 5 million dollars??

Who was I kidding?

Whether it was youth, naivete, stupidity or a healthy combination of all three I decided to take the next step. There was a tiny thread here that was intrigued me so I decided to keep pulling on it until the business gods (or my bank) forced me to stop.

I flew out to LA and met with the investment bankers and the owner. We hit it off. Check.

I spoke on the phone with their main investor. Check.

I spent a week flying around the U.S. meeting one-on-one with all the key executives. Check.

We agreed on a price of just over 5 million dollars, $2 million of which had to be paid at closing.

Now, If you have been paying attention, I did not have 20,000 dollars much less $2 million to pay to anyone.

But the string I was pulling was pretty long now. I could not stop myself from pulling.

So I created my own little book. A concise narrative and spreadsheets of what the combined companies would look like at closing and over the next 5 years. I asked some friends in the investment banking space if they knew of someone to talk to who might lend or invest the money. I had no right to raise this much money but why not see what happens?

The first banker I met with told me they only do deals of $10 million and over, but gave me two people that I should call that might be a better fit. Then this next batch said it was too big for them, or too small… But gave me two more people to call. Meeting after meeting, covering more than 40 Goldilocks “too hot or too cold” moments came and went. Each time, I refined my pitch and my numbers. Finally, one of those generous referrals paid off. I had found a small investment bank that had a fund that was looking for deals exactly like mine. Our poor balance sheet did not scare them and they loved (Or at least were comfortable with) the plan.

Victory!

With the $2m secured, we forged ahead to drafting documents and working on a transition plan. To my daily amazement, this looked like this deal was happening. A deal that would flip us into profitability and transform our position in the market.

Two weeks before closing the owner of the company invited me to come to his vacation home for lunch. Off I went thinking excited to be able to discuss our future together, world domination, etc..  It turns out, he asked me to come there to tell me he had cold feet and decided he did not want to sell the business, to anyone.

Defeat. Total defeat.

Wait, what the fuck??

I hear you… Howard, why did you just spend 616 words telling me about an epic business LOSS?

I want you to hear it all because it is one of my most memorable business experiences and lessons. I see it as one of my biggest victories (After the week (or ten) of heartbreak and sadness, of course).

While I did not make the acquisition I gained something that turned out to be far more valuable. A real-life experience, lessons, contacts and new skills that I could have not learned any other way.

But the biggest lesson of all has been this…

Keep pulling the string.

Time and again, my clients explain to me various opportunities they are presented with and, before taking any action, decide how each opportunity will end and why they have no business pursuing it.

Time and again, they can explain to me the future they wish they could have for their business and life and, in the same breath, follow it with all the reasons it will never happen.

Somehow, we magically know the outcome of our business even though we cannot possibly know anything more than the next quarter or year (This pandemic should have proved this to you).

I knew very little about acquisitions, raising capital and the legal aspects of these types of larger deals. Somehow, maybe from desperation, I decided to pull on the string that started as nothing more than a simple cryptic letter.

Every time I pulled that thread a bit more, I got a crash course in raising money, acquiring businesses and dealing with the many, many bumps along the dealmaking road. Investment bankers were generous in sharing feedback on my pitch and even more generous in sharing contacts. I learned how to manage the many moments where deals look like they will fall apart and ways to get deals back on track. I built a network of bankers that I would work with and refer others to for years.  These bankers now knew I was looking to acquire businesses and started to send me more deals.

I completed 5 other acquisitions after this one bombed and have helped countless clients acquire or sell their businesses using bits and pieces of what I learned from this one failed deal.  None of it would have happened if I did not push myself to pull that first small thread.

So now I ask you, where have there been threads that you have decided not to pull because you thought you knew where that particular thread would end? In the words of English actor Jim Broadbent, “We’ve all got a black book of missed opportunities.”

Lots of people talk about missed opportunities. Looking back, they usually were missed because we decide upfront where that opportunity will lead even though we have absolutely NO idea.

If I am honest with myself, I have missed opportunities because I was worried about trying and failing. Of having an outcome that would have hurt my pride. Of seeming foolish or convincing myself it would be a big waste of time.

Some of those reasons even make sense as I write them. But if they were true, why would missed opportunities be so connected with regret? 

Here is a challenge for you, take out a piece of paper and start to write down past opportunities where you decided they would not work out before you even took a teeny, tiny step forward.

Is there a common theme to them? How could you rewrite that theme (or story you created) so it would work better for you? Write it down.

What would have been the real harm if you had decided to pull the string a bit and see where it would have lead you? Write that down too.

I pulled a string, was left at the business wedding altar and, because I saw the opportunity all the way through to the end, have no regrets.

The next time an opportunity that seems out of reach appears before you I hope you may see it as a tiny thread that could unravel into an incredible experience and then give that string a little pull.

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