Adrie Reinders, who I met recently, provided the following article about networking. He is a serial entrepreneur and co-founder of E.Factor, which is a vibrant online community and virtual marketplace designed for entrepreneurs, by entrepreneurs.
Deal Making
Deal making is a phenomenon that is seldom given the spotlight. Personally, I think it is one of the most exciting things to do.
Deal making is networking and connecting to the highest degree. With networking, it is often not clear yet why people connect and therefore more or less non-committal. You don't know yet what it is that you can achieve together but there is the willingness to explore further. Sometimes these connections are for the short term only - where a real relationship does not get the chance to develop. If it is longer term - people can end up doing business together, depending on factors such as "click" and timing.
Deal making to me is the ultimate form of networking and connecting. You have a very specific objective, and a clear agenda - the art is in finding the other parties that can help you achieve your objective although each will have a different agenda and goal based on their core business. And to top it all, timing is ofcourse an immensely important factor. Particularly in this time, where money is tight due to economic struggles, deal making for me is a great challenge of the mind.
Most of the deals I have been involved in, are related to building IT companies. For instance, the need to get a controlling majority in a quoted company in order to do a reverse take over, but also fundraising for an IT company, preparing a buy-out and organising business development for a company in order to have it grow faster.
The number of people involved in these type of major deals is often extremely large and varied - you have bankers, investors, management of the organizations involved and board members who typically are dealing with questions such as who will make the most money, whose egos are involved and who will be assigned most of the power. Then there are the emotions of employees - in short - a high-pressure vat with interests and emotions of all parties at stake. As a leader in this process it is a matter of being tough some of the time, massaging and cajoling the other - so it is all important to get to know as much as possible about all the players involved, and getting to know them well. The better you accomplish this, the better the outcome will be. The more unknown players in the game - the harder it will be to predict the outcome.
As I have raised before - connecting is about ensuring that you establish Trust. You have to get to know people over a period of time and gain mutual experience in order to establish a trust relationship.
Deal making is truly like a Chess game - you have to estimate (but preferably based on as much 'knowing' as possible) the moves of the other players. If you don't, it'll be more like a poker game. Which would you rather be playing with your company?
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