You need to be very careful when working with big repeat players in any game.
Examples:
- Selling your real estate to a private equity firm or big local investor
- Selling your business to a private equity firm or aggregator
- Suing a big company or an insurance company
1/n
Examples:
- Selling your real estate to a private equity firm or big local investor
- Selling your business to a private equity firm or aggregator
- Suing a big company or an insurance company
1/n
Why do you need to be careful?
Two main reasons:
1. Because this, for them, is a repeat game, they know all the tricks of the trade, literally. They can avoid pitfalls and get you stuck in them, even without your knowing.
Two main reasons:
1. Because this, for them, is a repeat game, they know all the tricks of the trade, literally. They can avoid pitfalls and get you stuck in them, even without your knowing.
2. "But, I have a great broker and lawyer!" - hate to break it to you, but this matters less than you think. When you hire a broker, their first objective to make the deal happen at any cost. The only downside to doing this is their reputation and since you're not a repeat player
the risk to their reputation is moderate compared to the risk of their reputation were they to get aggressive with the repeat player in the game. Plus, they know that you don't know what's going on as well as the counterparty, so they will err on the side of screwing you even
though they work for you. The situation is a bit more complicated with lawyers, who have strict requirements to their clients, but it still happens and it can be worse because you expect it less. Let's say you need a lawyer to get something solved with Amazon or a government
entity. Even if you're totally in the right, if they take an action that they feel will piss the counterparty off they know that every time going forward that they have another client like you their job is going to be harder. yes, there are reputation networks for non-repeat
players in these games, but do they want to develop a reputation as a pain in the ass to deal with with the other side, even if that's the right thing for the client? Further, these intermediaries can switch sides. Do you know how much a client like Amazon or a PE firm can
shower on your intermediary compared to the slog of attracting and selling small fish over and over? It's a big difference.
Not all intermediaries play these games, but a metric shit ton do.
Seller and suer beware.
n/n
Not all intermediaries play these games, but a metric shit ton do.
Seller and suer beware.
n/n
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