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  • markturner5

The "Goldilocks Deal"

A wise man (I forget which one now) once said to me “there’s no such thing as a bad first business development meeting”. By that he meant any two companies, with a reasonable amount of alignment, in a similar industry, can find some sort of overlap or potential opportunity for an initial conversation. The true test of whether there is commitment and momentum however, is if there is ever the second, third and fourth meetings required to actually seal a deal.

Over the years I have worked on literally hundreds of deals – sales, business development, funding, corporate development - many of which have succeeded but many more have not. And it’s those “not” ones which have intrigued me. They’re the ones which need to be avoided as they’re a potential waste of corporate time, energy and money. In analyzing what goes into the perfect deal, and what was missing from failed deals, I have narrowed the elements down to what makes up the “Goldilocks Deal” – not too hot, not too cold, but just right.

There are 5 elements here, and I think you should assess all of your potential deals by these metrics to see if you’re truly progressing or just wasting everyone’s time:

1) Size

There is a perfect ‘size’ for a deal. Some may think that the bigger is always better but that is just not the case.

Some deals suffer from being too big to close – they become burdensome, with too much complexity and politics attached. The opposite is also true – a deal which is too small can lack the momentum and rationale for anyone to care enough to get it finished.

A deal with the correct size will feel just right – it needs to be moving with its own momentum and not too encumbered. If you think it’s getting too big don’t be afraid to take elements out and put them on a future road map for another time. If it’s too small, find something else to augment it, to make it more strategic for both sides.

2) Timing to start

They say timing is everything and while that may be true for golf there is also something to be said for ideal deal structure. Certain companies have windows where they just get shit done and certain windows where they are heads down in budgeting, planning, acquisitions or year-end close and there’s just no point trying to get them to focus on anything else.

To not waste time, it’s important to lay some expectations out at the beginning and be honest – ask do we both have the time and attention to get this going right now? Or is there a better time when we agree we’ll come back to it? If you’re badly aligned at the beginning, there’s a high likelihood one party will be frustrated later.

3) Timing to finish

In addition to when you start, there is also an optimal time in getting a deal closed. Deals that linger too long lose their momentum and whither on the vine. Deals that are rushed too fast can get people nervous and send the wrong signal that one side is desperate, which can put them at a negotiating disadvantage.

You have to feel this and adjust for the size of the companies involved. Unfortunately, big companies move like treacle because they have so many people and departments to weigh in and you need to factor that into your expectations. Small companies can rush to a deal because they don’t have the people or the time to correctly vet it (it’s often then not well executed which is sometimes OK if both companies acknowledge this and build in enough flexibility to change later). But ensure you factor size in before you conclude that the other party is not moving at the same speed as you.

The key here is to be realistic and look for ‘critical events’ which can be used to set timing goals to close. If you don’t have one then maybe you should create one because any deal that has not progressed for more than 3 months is probably just a Zombie and you should just call it dead and put it out of its misery.

If neither party has an identified time to close then make one up - sometimes these can be arbitrary like “we’ll announce this in September”, sometimes a major trade show or timed around a corporate earnings call. Regardless, you need to establish when both sides agree this deal should be done and work back from that to establish milestones to make sure you’re on track.

4) People

Companies do not do deals, people do. It’s unbelievable to have to say it but there are no AI bots at Google that sign deals on their behalf – you have to engage with real people there just like anywhere else. All deals, beyond the simplest transactions, require human interaction and people are just unpredictable, quirky, driven by ego and wonderful. But no two are alike, so it’s important to make sure you are dealing with someone with whom you can have mutual respect and an honest conversation. I didn’t say you have to like each other, but you can’t get a deal done if you just can’t stand each other.

You should validate early on that your counterpart from the “other side” is similarly leveled to you and has the authority to actually close a deal. And then look past the title and see the actual person. You can guarantee that they have good days and bad, they have politics at work and balance issues at home, they probably want to move up and be viewed positively within their company. Never forget that you’re dealing with another person and check that you’ll both come out of this looking good, otherwise it’s probably the last deal you’ll do with them.

Also, life is too short to deal with assholes. We all know who they are so just avoid them. If we all do it, those people will eventually be fired. Don’t give them the satisfaction that you think they’re important.

5) Exposure

Sometimes you want a deal exposed to the most senior level of an organization – especially if speed is important. Sometimes exposure is the last thing you need because you want to massage a deal through internal politics before it gets too exposed. Managing the exposure of the existence of a deal, the terms of the deal and the likely time frame to close, should be strictly managed on all sides. I’m not arguing that your keep your management in the dark but just recognize that sometimes you need exposure, and sometimes you absolutely do not. While you don’t want to blind side your boss and rush in for approval of something for which she/he has no context, likewise you also don’t want them breathing down your neck constantly for updates, especially if you have not yet correctly vetted items 1 through 4.

Again, it’s also important here to be at parity. Both sides should acknowledge and be aligned about how much exposure a deal is getting so one CEO is not going to call the other to discuss the deal and find their counterpart hasn’t even heard about it.

An agreed plan for which gates you need to get to before you both escalate up the chain is the best way to ensure both parties are aligned.


There are no entries in Salesforce for these factors – you need to be honest with yourself and ‘feel’ what status you are in. The good news is most of these can be adjusted mid-deal, if you’re paying attention.

Enjoy the porridge, Goldilocks!

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