Maximizing Exit Value, It's a People Business, & a DEEPER Dive Into the Basic Psychology of Deals.
This Week On How2Exit, Chatting With A Global Exit Expert About Great Ways to Optimize Exit Value and A Mentor/Author About The Human Connection Side Of M&A. DEEPER into the Basic Psychology of Deals.
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Alex Nghiem is an exit specialist and M & A advisor who specializes in the digital world. He has been consulting for a number of years and recently started helping clients with exiting their businesses. He noticed that the marketing and connecting with buyers part was often dropped, so he decided to specialize in that. He now helps clients grow their businesses and get it ready for exit, as well as marketing and connecting with buyers.
Alex discusses his experience in mergers and acquisitions, and how his background in programming and technology has given him a huge advantage in this field. He has sold and bought companies and advised them, and he specializes in connecting buyers and acquirers of different types. He has written six books and the second one was one of the first to explore software as a service business model. He understands programming and technology at a deeper level than many in his field, and he can relate to his clients since he has been in their shoes.
Alex has been very fortunate in the ability to travel and experience many different countries. He was able to close a deal with a buyer from the US and a seller from Australia without any of them meeting in person. This is done through the use of modern tech and a global economy that opens up a much larger pool of buyers and sellers for deals to be made. However, for most brick-and-mortar businesses, the buyers are usually limited to the local or regional area, with larger deals requiring a regional or national chain. Listen here: (58:08)
Read our notes on this interview: 11 Things We Learned About Selling a Business By Interviewing Alex Nghiem - Global Exit Expert
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Marc Morgenstern is an author and mentor capitalist with 45 years of experience in the M&A space. He recently released a book on the topic and was invited to the How2Exit Podcast to share his story. He got his start selling encyclopedias door to door, which taught him the skills necessary to navigate m and a deals. He learned the importance of initiating conversations, listening, and exploring and illuminating the potential customer or counterparty. He has since used these skills to facilitate deals and guide others in the same space.
Marc Morgenstern has had extensive experience in the M&A world, both as a lawyer, CEO, director, and investor. He has observed that people often make decisions based on ego, fear, time, pressure, greed, and perceived self-interest. He has also noticed that developers and entrepreneurs often have strong personalities and faith in their convictions. He started doing real estate syndications as a lawyer and enjoys musicians.
The conversation is between Marc Morgenstern and Ron Skelton, and they both discuss their appreciation for developers and musicians. They explain how both groups share a similar trait of having to believe in their dreams and having to sell their dreams to get the capital they need. They also talk about how entrepreneurs must believe in the strength of their ideas even when there is no guarantee it will succeed. They continue to discuss how those who create something must also consider who could buy it and build it in a way that would be attractive to those potential buyers. Marc also points out the difference between building something that can be sold and building something that can be owned forever. Ultimately, they both conclude that having outside investors requires the creator to be prepared to sell the business in order to make sure that they get their money back and more.
In this conversation, Ron Skelton and Marc Morgenstern discuss the key lessons from Marc's new book, The Soul of The Deal. Marc explains two key maxims from the book: an expectation unarticulated is a disappointment, guaranteed and deal makers need to learn to listen like jam band musicians, not like lawyers. He also introduces the idea that people, not spreadsheets, are the epicenter of every deal. Marc discusses how people often assume that their words have been understood, when this is rarely the case. He then explains that money is always necessary, but it is rarely sufficient when it comes to making deals. He encourages deal makers to listen intently and to understand what the other party really wants and needs in order to make the deal work.
Listen Here: (57:55)
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This week’s “DEEPER” Dive: The Basic Psychology of Deals.
As I sit here and type this we have a team of about 8 advisors, coaches, and seasoned exit entrepreneurs collaborating on a book about building rapport. Since this topic is the center of my thought patterns lately and so critical to getting deals done, It seems like a great time to do a DEEPER dive into the basic psychology of deals.
What is discussed in this article applies to SMB M&A, Real Estate, and most other interactions where the seller may have some emotional bond with the asset being acquired. Many lessons in this article apply to everyday interactions between you and others.
In this article, we will explore the basic psychology of deals in SMB M&A. We will examine the motivations, fears, and emotional factors that influence the decision-making process of buyers and sellers. We will also discuss the importance of establishing rapport between the parties, the need for sellers to have a clear vision of what they will do after the sale, and the importance of knowing that the business is going to a safe pair of hands.
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