Don’t Be Too Eager to Make a Deal

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If talk is cheap, advice is cheaper. I sprinkle advice out like salt on french fries, not knowing if it works or not. You’re probably thinking: typical newspaper columnist. But hear me out.

About a decade ago, I met my friend Andrew for lunch at Henry’s Hunan Restaurant in San Francisco—hot and spicy. He was from Washington, knew everybody and had worked at a policy-strategy shop. He had even done business with

T. Boone Pickens,

the legendary wildcatter.

“I owe you,” Andrew insisted, “for the advice you gave me.” I had no idea what he was talking about, and my face must have shown it. “The ‘put it in the corner of your desk’ trick,” he reminded me. It all flooded back.

I once had a boss who would never sign anything, at least not right away. Instead, he told me, he would put the document in the corner of his desk. He would see it every day—and not forget about it—but not sign it. Eventually, a series of people would call until the person in charge got on the phone in a huff. Then my boss would say, “Hey, I’m happy to sign this, but what do I get?” At that point, he could ask for almost anything.

It works because it makes the impersonal personal. In 1999 one of our fund’s private investments was going public. The bankers at

Goldman Sachs

sent over a standard 180-day lockup agreement. I hated lockups. I’d rather sell into the frenzy, like

Dropbox

last week. What the heck, I thought, I’ll just put it in the upper right corner of my desk. Over the next few weeks, I got a series of calls and voice-mail messages asking me to sign the lockup. I ignored them, and eventually the head of tech banking called.

“You’re holding up the deal. We can’t proceed with the IPO without your signed agreement,” he told me. “Well, I doubt that,” I replied matter-of-factly, “but what’s in it for me?” After a pregnant pause, he asked what I wanted. Bingo. I was ready: “How about an allocation of 30,000 shares for my investors. It would beat the 1,000 shares we normally get.” Another pause. “OK. Agreed. Fax the signed pages within the hour.”

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Back at Hunan, Andrew, who was maybe 30, told me about a broadband deal he put together. The story went something like this. “Yeah, so, I make a zillion phone calls and the deal gets done, so I get a decent number of shares and it is up and running. But maybe a month ago,

JP Morgan

gets involved, and they are going to do a big financing. I get a

FedEx

package with documents to sign that has me giving up almost all my shares.”

I smiled. “So I put it in the corner of my desk,” Andrew told me. My smile became laughter. “A secretary calls and asks for signed documents. I told her I couldn’t sign them, and she told me that it was holding up the deal. Then the next day a managing director calls with a very stern voice, telling me I was holding up a very important deal for the bank. Not JP Morgan. The bank!”

It isn’t healthy to eat Chinese food and laugh so hard. “Oh, this gets better. Last week I get a call from

Jimmy Lee,

the vice chairman. He starts yelling at me to sign the papers. He’s not going to have some kid ruin this deal. I calmly asked if I could put him on hold for a second. Then I speed dial T. Boone Pickens.”

Andrew explained the situation, then patched the two lines. Mr. Pickens introduced himself and went straight at it. “Now I understand you’ve got some issue with my friend Andrew here. Well, I’ve done business with Andrew for years and he’s an upright and outstanding young man and seems to me here that you’re trying to get somethin’ from him that he doesn’t want to give you, and that just doesn’t sound right to me.”

The “corner of your desk” trick forces others to confront you personally, so use it wisely in this era of clicks and tricks. Andrew got to keep his shares, and my side hurt from laughing. He said, “I feel like I should pay you or something.” I looked him in the eye. “You just did.”



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