5 New Year's Resolutions for Entrepreneurs to Close More Deals

In this article, Scott Edward Walker, the founder and CEO of Walker Corporate Law Group, offers five key resolutions for entrepreneurs aiming to close more deals in the new year.

Resolution 1: Create a Competitive Environment

The article emphasizes the importance of creating a competitive environment for entrepreneurs when negotiating deals. This strategy leverages the natural human tendency to compete, potentially resulting in a more favorable outcome for the entrepreneur.

• Competition validates interest and can be used to play potential buyers off each other.
• An example is cited involving an auctioned deal where a competitive environment led to seller-friendly terms, including broad materiality qualifications and a capped liability. In contrast, a private company transaction without competition resulted in buyer-friendly terms.
• While creating competition can be advantageous, the article cautions entrepreneurs to proceed carefully and seek experienced guidance to avoid jeopardizing a deal altogether.

Resolution 2: Leave Your Heart at Home

The article strongly advises entrepreneurs to approach deal-making with a detached, rational approach, leaving emotions out of the equation. This involves establishing clear dealbreakers upfront and sticking to them even if it means walking away from a deal.

• Entrepreneurs need to remain objective and avoid getting emotionally attached to a specific transaction.
• Venture capitalists and private equity firms often leverage emotional tactics, so having a predetermined game plan with dealbreakers is crucial.
• Examples include setting minimum acceptable purchase prices, maximum liability caps, and defining escrow conditions.

Resolution 3: Work Your Balls Off

This resolution is all about dedication and hard work. The article emphasizes that success in business, like in sports, often requires relentless effort and commitment.

• The author draws parallels to his experiences as a young corporate associate and as a tennis player, emphasizing the correlation between hard work and achievement.
• The author notes that while some entrepreneurs are driven and work long hours, others may lack the same dedication and struggle as a result.
• The key takeaway is that success in entrepreneurship is not a shortcut; it requires relentless effort.

Resolution 4: Protect Yourself from Investors

The article stresses the importance of due diligence when dealing with investors. Entrepreneurs must thoroughly research potential investors and understand their motivations, past behavior, and potential conflicts of interest.

• The author emphasizes the long-term relationship between entrepreneurs and investors, highlighting the need for due diligence before accepting funding. This process should involve research, personal meetings, and gathering references.
• Key considerations include the investor's track record, trustworthiness, alignment with the entrepreneur's vision, and the value they can bring to the venture.
• A video discussion on Mixergy.com is cited as an example of how failing to adequately diligence investors can lead to negative experiences, highlighting the importance of thoroughly understanding the individuals involved.

Resolution 5: Retain a Strong, Experienced Lawyer

The article strongly advocates for entrepreneurs to seek professional legal counsel, emphasizing the need for experienced lawyers to navigate complex deals and mitigate legal risks.

• The author cautions against DIY legal solutions or relying on less experienced attorneys to save money. This can lead to significant legal vulnerabilities and potential financial losses.
• The Madoff affair and other high-profile cases are cited to illustrate the dangers of working with unethical actors.
• The article also highlights potential conflicts of interest among service providers, such as investment bankers who may prioritize deal closure over the entrepreneur's best interests. A personal experience is shared illustrating the importance of having a lawyer who can protect the entrepreneur's interests.
• The author emphasizes the role of a competent lawyer as a partner in understanding risks and negotiating strong protections, providing insurance against future legal challenges.