Episode 246: The Power of Diverse Perspectives in Dealmaking with Michael Frankel
Michael Frankel is Founder and Managing Partner of Trajectory Capital. With an impressive background encompassing c-level executive roles in corporate development, strategy/innovation, CFO, and COO positions, Michael has played pivotal roles in both large and small growth companies. Throughout his career, he has spearheaded disruptive innovation and fueled aggressive expansion in global technology, information services, and professional services organizations such as Deloitte, LexisNexis Group, IRI, GE Capital, and VeriSign.
With a remarkable track record of executing growth strategies, Michael has successfully leveraged various approaches to drive success. He has orchestrated over 110 acquisitions and strategic transactions, developed new offerings and products through innovative thinking, forged complex ecosystems through alliances and partnerships, facilitated market and geographic expansion, and made corporate venture investments in 18+ ventures.
THE PURPOSE OF A DEAL
Michael places heavy importance on aligning any deal with the overarching goals of a company. Instead of pursuing deals for the sake of it, Michael suggests starting by defining what the business aims to achieve. Whether it's a new product, market expansion, or acquiring a specific technology, understanding the desired outcome guides the selection of the appropriate transaction type.
To start: Understanding each person's perspective in a deal is vital for effective communication, trust-building, and achieving mutually beneficial agreements.
THE VALUE OF VARIED PERSPECTIVES
Having sat in different chairs throughout his career, Michael acknowledges the importance of embracing diverse perspectives. Whether it is the risk-oriented mindset of lawyers, the analytical approach of finance professionals, or the entrepreneurial spirit of deal makers, each perspective brings unique insights to the table. By fostering empathy and understanding among deal-making professionals, better outcomes can be achieved through collaborative decision-making.
- THE SELLER'S PERSPECTIVE
As Michael transitioned to the seller's side, he gained a deeper understanding of the challenges faced by small companies during the due diligence process. Large corporations often present sellers with lengthy lists of requirements, expecting comprehensive documentation. Small companies, however, may not have the resources or playbooks to fulfill these demands, creating uncertainty and anxiety. This realization reinforced the importance of empathy and support for sellers throughout the deal-making journey.
- THE INVESTOR'S POINT OF VIEW
In his current role, Michael has gained insights into the investor's mindset. Investors carefully consider the timing of a deal, balancing the potential growth of a company with the need to seize opportunities. Understanding the time value of money is crucial, as waiting too long for a "perfect" deal may result in missed opportunities. Michael highlights that some deals may not look favorable on paper but have the potential for significant synergies and growth, requiring a nuanced approach in evaluating their value.
Understanding the before, during, and after phases of a transaction is vital for deal success. By embracing empathy and considering the viewpoints of all stakeholders involved, deal makers can navigate the complexities of the deal-making process with greater wisdom and achieve mutually beneficial outcomes. Remember, the end of a deal is just the beginning of a new chapter, where the true value of the transaction is realized through integration, growth, and strategic implementation.
Corey Kupfer is an expert strategist, negotiator, and dealmaker. He has more than 35 years of professional deal-making and negotiating experience. Corey is a successful entrepreneur, attorney, consultant, author, and professional speaker. He is deeply passionate about deal-driven growth. He is also the creator and host of the DealQuest Podcast.
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