Deal Momentum Beats Perfection

Shaan Puri shares his experience and strategy for selling companies, emphasizing that most companies are sold rather than bought, and the process requires careful planning, psychology management, and maintaining deal momentum.

Key Points:

• Reality of Company Sales:

  • Most companies are sold, not bought (unlike Instagram-type unicorns)
  • Selling happens when:
    • You get a great offer
    • You don't believe in the business anymore
    • You don't want to run it anymore

• Psychology and Communication:

  • Managing your own psychology is the #1 most important thing
  • Be selective about who you tell:
    • Discuss with cofounders ASAP
    • Be careful with team communication timing
    • Consider investor discussions strategically

• Strategic Buyer Categories:

  • Unicorns (high-growth companies)
  • Dying dinosaurs (incumbents needing fresh blood)
  • Adjacent alligators (peers/competitors)
  • Talent farms (acquiring for talent)

• Deal Making Process (DENNIS System):

  • Demonstrate value
  • Engage physically (get meetings)
  • Nurture dependence (tap into emotions)
  • Neglect emotionally (create competition)
  • Inspire hope
  • Sell entirely

• Critical Success Factors:

  • "Birds fly, fish swim, and deals fall through" - expect it
  • Deal momentum is everything
  • One choice is no choice - need multiple potential buyers
  • Make it easy for buyers:
    • Clean financials
    • Clear technical documentation
    • Well-organized data room
    • Write their internal memos for them

• Post-Term Sheet:

  • Sprint hardest after getting the term sheet
  • Don't relax until the deal is closed
  • Maintain relationships even if deals fall through
  • Celebrate properly after closing