Deal Structuring: An Investor’s Guide to Better Deals

I’m no master of negotiations. Yet, I often find that I get what I want in a deal. This does come not from persuasive speaking but from years of experience in effective deal structuring. Knowing how to properly organize a deal can significantly reduce the need for extensive negotiation. Many focus on negotiations, yet few delve into deal structuring's intricacies. It's always puzzled me and it's what sparked me to write this book. Think of deal structuring as your toolkit. If I were to ask you to build a house but only provided a saw, a hammer, and some boards and nails, you'd likely end up with a rather shabby-looking abode. But, if you were equipped with a full range of tools, knowledge, and materials, you'd construct something far superior. In this book, you will: Be introduced to the fundamentals of deal structuring Learn 19 proven deal models for structuring deals Discover 39 key elements of deal nuances Access 32 actionable clauses for your term sheets Explore 9 specific deal structures Receive 257 pages of invaluable insights Gain the distilled expertise of 20 years Consider deal structuring through this lens: the more tools you have, the better your negotiation outcomes can be. Deal structuring is all about crafting the terms of an agreement to suit everyone involved—business owners, investors, and lenders alike. By better understanding deal structuring, you can negotiate more favourable terms, reduce risks, and increase the transaction's value. When I first started investing in companies, I did what most do: I found something I liked and offered a sum of money for a percentage of a company. It was the "You get X money and I get Y% ownership" way. It was a simplistic approach. Twenty years and sixty investments later, I've learned that there are many other ways to structure deals that can be beneficial for you as an investor and your counterpart too. My background is originally as an entrepreneur, and in the past, I have profited well from my ventures. I've since moved to the other side of the table and set up an investment firm akin to a family office. Today, we are a small team of eight people at the investment firm, Kjøller. Whenever we talk to startups or established businesses looking for funding, we always try to identify the company's needs and how we can align them with our investment principles, using the models, tools, and elements outlined in this book. Within these pages of this book, I've distilled what I've learned over the years. It's akin to a cookbook but for transactions, filled with recipes and pointers for forging superior deals. The book aims to deliver insights into the aspects of deal structuring, coupled with actionable advice on creating equitable and sensible deals. It delves into various deal types, the elements that influence deal structures, and the techniques for finalising terms. While my perspective is rooted in that of an investor, entrepreneurs, startup founders, and business owners alike will find this book quite beneficial as well, as it gives insight into the thinking of an investor. Whether you're an experienced professional or a newcomer to investment and deal structuring, this book will arm you with the insights and abilities to manoeuvre through the transaction process.