Never do business with this person
Of course I keep a list of the shady people I have met in the 20+ years I have been doing mergers and acquisitions in the Internet industry. The reason I maintain this “Never do business with this person” list is obvious, but there are other aspects of the list that are valuable yet maybe not immediately obvious.
Every day I meet new people from around the world. Most of them are honest with genuine intentions. As I get to know some of them I think to myself … “if I needed to hire someone with those skills, I would love to work with them on a regular basis”.
On the other side of the ethical spectrum …
About 1-3 times per year, warning signs appear and I think I just might have a new addition to the list. Sure, I might be hypersensitive to this but it’s my job. When I work for buyers I am supposed to sniff out fraudulent sellers, and when I work for sellers it is my job to keep crooks from getting in the way of legitimate buyers.
(A not so commonly known fact: Crooks on the buyside can cause just as much chaos as a crooked business seller.)
I am not quick to add someone to the list, but when I do, there is no doubt in my mind they belong there. In almost every instance I lose sleep as I access damage control and plan the escape from this “satan in a suit”.
What information is on the list:
Other than their name, I include the company, the other parties in the transaction, what they attempted to do (or were successful in doing), what the costs were, if there were warning signs, who else on their side probably knew about it, and any other highlights. And I of course keep all of the germane emails I can gather.
A few years ago I started to update the list from time to time because I want to keep up with these people … not because I am going to reach out to them, rather I just want to know where they pop back up, because they almost always do. So I update the list by adding the name of their new venture or who they work for now, what city/country they are supposedly working in, what role they are assuming and any other highlights. Some of them disappear for years then pop up running a new company … or as a senior/middle manager of a private company … or in a country few people ever want to visit … no doubt running from something.
Unlike working in many other industries where someone can move a few hundred miles away, replicate their unethical ways and go unnoticed for a period of time … working in one of the many Internet service sectors anywhere in the world, is in many ways similar to working across the street from what they were running from. It is simply hard to hide.
So who else sees my list other than me?
No one else sees the list with all of the associated notes, but I do share some of the names with a very short list of other M&A professionals around the world who I have known for many years … and they share names with me. This collaboration has saved many people an enormous amount of grief, and money.
Does anyone ever come off the list?
Absolutely not. Because, I don’t have the patience for it … and it’s too risky.
So who makes the list, and who doesn’t?
1) Do buyers who took advantage of a desperate and/or uneducated seller make the list? … No
2) Do sellers who sold a near bankrupt company which everyone knew was a complete financial and operational mess, make the list? … No
3) Do buyers who are rude, classless, boiler room, hammer closing, “expert” bullies, make the list? … No
4) Do people who appear bi-polar, schizophrenic or have substance abuse issues and make terrible decisions as a result, make the list? … maybe (It’s a case by case basis.)
People make it to the list when they deliberately set out to steal from someone else, whether they were buying or selling a company (or assets). In my opinion, “stealing” is easy to define, identify … and never forget. The definition doesn’t need calibrating, it’s consistent across industries, and it doesn’t weather with time.
Please feel free to Tweet, Like, Share, or Smirk and Smile.
FYI, I send out a “Weekly Internet M&A Deal List”. This list contains between 30-40 deals. Each week it is sent out to 1,000s of Internet executives and financial buyers around the world. If you would like to see the latest copy, message me. If you would like to be added to the auto weekly version, you can either sign up on my web site or message me and I will add you.