Tommy Dobczyk explains how to use precise wording and strategic pressure in deal negotiations. He argues that a 2-year note beats 2-year equity because it has a higher claim on assets, and that being willing to walk away forces the other side to reconsider, especially when competing offers are in play.
Chapters
Were you in the deal room today? 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. Like, we're You know, I'm not, I'm not out to do a win-draw-win or win-draw-lose with anybody. And in this case right here, it's just a win for him, not for anybody else. And we have to move on from that. 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.