Lesson 80: Favor
About the Searcher
Yousif, Jerry, and I flew to South Africa this week, and toured Johannesburg and Cape Town. The three of us are classmates at Chicago Booth. They each completed internships in investment banking this summer, which often required work weeks of 100+ hours. This trip was a celebration of a job well done this summer for all of us. After days with savory ostrich steak at local restaurants and epic views from hiking up Table Mountain, I reflected on the moment. I could have never planned such serendipitous connections and travels.
I am filled with gratitude for this moment in my life, but I am not entitled to any of it. Besides hard work, several pieces of this puzzle are made of favor. For example, my goal is to pursue entrepreneurship through acquisition, where I will raise a fund and acquire a business. The pieces of hard work were 4 years in sell-side and buy-side M&A combined with my ETA internship this summer at Sterling Labs. The pieces of favor were meeting M&A attorneys, like Nia Wishom and Kanasha Herbert, who took the time to share questions I should ask the Seller when buying a business. I could not plan out these relationships, but these pieces of favor help fill out a beautiful picture.
About Entrepreneurship Through Acquisition
Outside of speaking with Investors and Sellers, I have spoken with several attorneys about my plans to acquire a small business. Through conversations with experts, like Nia and Kanasha, I have learned some of the initial questions to ask in legal diligence before an acquisition. There are five general areas for legal diligence:
Entrepreneurship Through Acquisition: Legal Diligence
Buyers, like myself, ask these questions to better understand what benefits and risks lie below the surface before an acquisition. Although you can control the questions asked, there are still uncontrollable elements. For example, you could spend hours with a Seller and their attorney asking all the “right” questions, but people get exhausted and sometimes leave out relevant information. Ultimately, the odds need to be in your favor to put the final pieces of the deal together.
About the Bigger Picture
Putting together this trip to South Africa had better outcomes because of my friends, Yousif and Jerry. Similarly, putting together a deal has better outcomes because of good counsel for both the Buyer and the Seller. Everyone who has experience in M&A knows deals can fall apart. The unknown facts and unexpected requirements cause these processes to stop and start. My intention behind meeting successful M&A attorneys is to build deep relationships with professionals who have experience overcoming the parts of a deal you could not anticipate.
My mission is to increase representation for Black leaders at the executive, investor, and board level. An investor once told me, “You are not in control during the deal.” He wanted me to understand that the sooner I accepted that fact, then the sooner I would ask for help, and the sooner favor could fall upon the deal. Executives, investors, and board members create the pieces of leadership to run a successful company. While Buyers, Sellers, and Third-party Professionals create the pieces to run a successful deal.
You always need to work hard and conduct proper diligence before acquiring a business. However, there is always that uncontrollable element. I am not entitled to these opportunities, but it is my responsibility to make the most of it and allow favor to do the rest.
This is Lesson 80: Favor. Next week is Lesson 81: Flexibility.
