the most common reasons PE/GE/VC Partners lose deals
One of the most common reasons PE/GE/VC Partners lose deals is that they are so focused on their own needs during fast moving deal processes.
Understandably, a deal Partner's mind is often flooded with thoughts of:
"How will I navigate Investment Committee"
"How can we position ourselves as the leading bidder and get exclusivity"
"How will we get our diligence done"
"If we don't win this deal, then..."
These are all table stakes, and by setting up a consistent process, you can take care of your needs in a reasonably orderly manner.
A better strategy for positioning yourself as the leading bidder is to ask:
"What does the seller need / why is the seller selling?"
"What does the CEO need / is the CEO excited to be leaving their old owners / what would they like to see as new ownership?"
By devoting more energy to thinking about the deal from the perspectives of the Sellers and Management, you can position your bid as the one that makes the most sense to them -- price must be competitive, but it is a great misconception that "price is the only thing that matters."
Next time you feel the Adrenaline of the deal process fill your mind with racing thoughts, take a breath, step back, and take a moment to evaluate the larger picture. While you will want to address your basic needs in diligence, understanding the Seller & Management's motivations will help you focus your time and simplify your deal process strategy.
By getting clear all parties' needs, you will more efficiently fill or kill deals, rather than spend tons of internal resources pursuing sellers who's needs aren't served by your more narrow agenda.
