Two negotiators use ChatGPT to draft a seller response in a live deal. They propose a $12 million structure with $4 million cash and $8 million rollover equity at 7% annual return, strategically positioning it to push the seller toward a cleaner option if they won't accept 0.5%.
Were you in the deal room today? First one that we discussed together was the response to basically saying, no, we're not interested unless it's option C. And then down here, it's countering the 3.5 pushback.
You put in the information from his email in the deal owner and said, help me respond this correctly.
And then I also, based on our conversations together, I voiced uh, to the ChatGPT, to the Land Shark, and then we basically have a conversation and come up with the best one. So here we clarified that we want option B at 0.5%. And then I also kindly included that the highest prior offer was approximately $9 million and we're presenting a $12 million structure with the additional upside depending on the path selected. And then I explained again, $4 million at closing, $8 million in rollover equity, 7% annual preferred return, and it's designed to meet and exceed the seller's return expectations while providing a strong overall outcome than a traditional note.
So go through and just kind of touch on the points that it made after it gave you that email so that people can understand how this is a coach. This is the way a coach would deal with you and say, this is why it's important. It's giving you what's called rationale. And so the letter that you just wrote was that Here's the reason why this version is stronger is related to the letter you just wrote. This is where you're going to learn why it was good to be this way about it, right? It's better leverage, more authority. Keep going.
Cleaner leverage, more authority. The meet and exceed adds a little bit of subtle. So the seller is targeting something in the $3.5 range in option B that starts to shift the structure into a place where option C becomes the more efficient path. For both sides. And then it continues to explain how if he's pushing Option B at 3.5%, might as well go with Option C because it's so similar in numbers and structure.
And again, this is, this is how you can, and you can tweak the way you say something to somebody. I can apply pressure or I can apply, in this case, I'm going to use a word that many people get triggered by, but manipulation. I'm manipulating you into understanding why my idea is better by saying you're already open to a 2-year note. Why not take 2-year equity? Well, I'll tell you why. Because a note stands a higher position than equity. So that's why he's getting a little frustrated with that. But that's okay. And so telling him we're not interested, we're moving on, forces him to eat his hat when it comes to the other 3 LOIs that are probably half of what we offered.
