Deal making is very different to most other activities, sports and business pursuits. In life, it generally pays to incrementally work our way up. To earn the right to play a ‘bigger game’. But when it comes to making a deal – selling something big, raising capital for our startup or doing something that requires a commitment from someone else the opposite is often true. In fact, I think it is easier to go big than small. Easier to make that big deal. Easier to raise a large amount of capital. While this sounds counter intuitive, when we consider the ‘why’ the reasons become clear:
- It takes the same amount of time to meet the prospects
- It takes the same amount of time to prepare the offer
- People in charge of small amounts of money, tend to watch it more closely
- People in charge of large amounts of money are mostly the decision makers as well
- People in charge of small amounts of money often need approval to spend
- Small investments get caught up in detail and administration
- Big investments are made by those who need ‘big outcomes’ and are less risk averse
- Big investments are usually made with OPM – other peoples money
Granted, getting the big meeting takes more work, but the simple truth is that raising 10 or 100 times the money, rarely takes 10 or 100 times the effort. In fact, it takes no more effort, and usually less. So when you’re next out deciding who to go for, remember the above and go straight to the top. While all rejections are created equal, all deals are not.
