Over the weekend, something amazing happened in Florida…
And it reminded me why it’s important to have the perfect partners with you on your deals.
As the folks that put men on the moon, NASA has decades of experience, experts and institutional memory.
Then along came Elon Musk. The brilliant billionaire entrepreneur-owner of Tesla, Hyperloop, SolarCity… and SpaceX.
SpaceX has innovated inside of space travel and exploration, and for the first time ever, SpaceX and NASA teamed up.
They partnered on a crucial test mission that just sent NASA astronauts Bob Behnken and Doug Hurley to the International Space Station (ISS)
icaboard a Crew Dragon capsule. SpaceX designed and built the capsule and rocket, while NASA supplied the launch facility, crew and tracking.
The SpaceX launch on May 30, 2020. Photo credit: NASA/Joel Kowsky.
It’s the perfect partnership.
The last time NASA sent an astronaut into space was almost nine years ago – on July 8, 2011.
NASA was too far behind the times to do it alone from a technology perspective. SpaceX could build a rocket better and cheaper. But it needed NASA’s experience and savvy when it came to actually getting the astronauts into space.
So this launch is a big deal…
And the success of it all comes down to the partnership.
How can we apply this lesson to the art and science of dealmaking?
Once you have fully dialed into your mindset as a dealmaker who commits 100% and takes massive daily action, then partnerships are the most important facet of deals.
There are a number of partnerships you need to build to make deals easier to close…
The partnership between buyer and seller
This is all about KLT – getting the seller to KNOW, LIKE and TRUST you.
It’s also about building credibility and rapport and positioning yourself as a safe pair of hands to take the business to the next level.
The key is to show how you will protect the employees, customers and legacy of the seller, as well as demonstrate your ability to grow and add value to the business via your skills, experiences and professional network.
This is especially important in consulting for equity deals where you and the seller become true partners.
This is also the case when you buy less than 100% of a business and the seller continues to benefit as you grow the business – both in terms of revenue and valuation.
The partnership between buyer and financier
Similar to the seller partnership, you need to build solid relationships with financiers.
Financiers are important if your deal needs a closing payment. Remember, you don’t necessarily have to invest your own capital into a deal…
You can use other people’s money (OPM) – seller financing, asset-based lending (leveraging accounts receivables, inventory, real estate, plant(s) and equipment), cash flow lending (SBA, CBILS, etc.)…
You can also sell equity in a deal to an investor.
However you plan to finance your deal, you will need to build trusting partnerships.
The partnership between buyer and deal team
After you sign a letter of intent (LOI) or term sheet to buy a business and you have all the financing in place, you will need a CPA and a lawyer to close the deal for you and handle all the paperwork and due diligence.
These deal intermediaries usually work on a contingent-fee basis, so it’s important to build strong, trusting relationships with them.
Remember, you are the coach of your team. You need to trust all the players – and they need to trust that you will lead them to a win.
The partnership between joint buyers
Finally, if you are buying a business in a sector you don’t fully know, understand or can add significant value to… you may need a buyer-partner.
This could be an angel investor, someone with sector experience or expertise or perhaps a general manager who shares in the equity of the business…
As with all of the above partnerships, trust is critical.
This brings me to my biggest takeaway from the partnership between NASA and SpaceX…
These two organizations have complementary skills. Neither could have completed the mission on its own. Their collaboration gave each one the power to succeed. 1 + 1 = 3.
Let’s say you are a marketing professional but you want to buy an engineering business because you are passionate about engineering.
As a marketer, you have the chops to grow a business, but your lack of engineering know-how will undermine any of the partnerships above.
You will need an engineering-industry person to partner with.
Meet Peter and Hanif:
From left to right: Carl, Hanif, Peter, Adam.
They are both in my Dealmaker Academy program. One MASSIVE benefit of that program (in addition to live deal reviews every week) is the in-person mastermind meetups throughout the year.
Peter and Hanif first met at my February 2019 meetup in the U.K.
Hanif is a marketer who wanted to buy engineering businesses. Peter has decades of engineering experience but doesn’t really know marketing.
The two decided to partner up and they now own multiple businesses together.
Their success all comes down to building a relationship and establishing trust.
And it begins with the very first email, phone call or LinkedIn connection.
Until next time, bye for now.
Editor and co-founder, Dealmaker Wealth Society
P.S. With my seven-day Dealmaker Launchpad program, you’ll learn how to get into the dealmaking mindset I mentioned above. Plus, I’ll show you how to grow your network and start making connections to potential partners. This course will help you lay the foundation you need to succeed as a dealmaker. Join today.