"Investment Banking is 10% Financial Analysis and 90% Psycho-analysis" – André Meyer  This blog is about the "other 90%"…

Love’em, if You Want to Sell’em

08/18/2013  | Tags: , ,

Love the horseIf you want to be successful in investment banking, you’d better be full of love.

I don’t mean you have to be romantically involved with your clients, or investors. Nor that you should pen them poems. It’s a different kind of love. Let me explain.

Investment banking is first and foremost about selling.  Sure, you must be able to read a balance sheet, model a business plan and write a hard-hitting selling memo. You also have to be an astute negotiator and have the drive and stamina to see a deal through to the end. These are givens.

What will make you successful, however, is the ability to be trusted by clients, prospects and investors.  If they don’t trust you, they will not entrust you with selling or acquiring for their company, nor will they prioritize the deals you are promoting.

Trust begets trust, so in order for them to trust you, you first have to trust them. It’s a process.  You build your trust in your prospects by taking interest in them to the point where you are confident that they are worth your time and you can mutually benefit each other. Most of your prospects and investors will be successful entrepreneurs and executives with short attention plans and complex personalities. Chances are however that most of them are likable people, as few can get rich on their own without a trusting team. The more you learn about your prospects and investors, the more reasons you will likely have to like them. (And the more potential reasons to not like some of them, in which case you should drop such prospects.)  Whoever remains on your list will start enjoying your trust, and your trustful behavior will gradually rub off on them and start making the trust mutual.

To up the ante further, it’s a good strategy to seek out admirable characteristics in your prospects which you would like to emulate. That will really help you love those people and make them trust you even more. Believe me, this works. I have used this technique even with very difficult clients with success.

Several years ago I represented an engineering company where the sales director was a distrusting and confrontational personality.  He acted as the bad cop in negotiations, but overplayed his role and pushed the buyer to the verge of quitting the deal.  I found it very difficult to reason with him, as I didn’t trust him to be fair and reasonable.  But I had to change my attitude towards him, if I was to influence him and neutralize his self-defeating tactics.

Therefore I challenged myself to find something in him I could admire…

Sure enough, I soon realized that he was a well-read and charismatic story-teller, who could disarm people in non-confrontational situations, such as during meals. From that point on, I focused on absorbing his bonding skills and repositioned him in my mind as a worthy and even fun person.

Almost immediately thereafter, he started trusting and listening to me and opened up to my suggestions on how to diffuse the confrontation with the buyer.  Eventually he was accepted as a credible counterpart by the buyer and we closed the deal.

The same principle works with investors.  There is nothing more powerful than an opportunity tailored to a buyer knowing his investment criteria and preferences where you have a relationship of mutual trust.

Learn to love your prospective clients and investors and closable deal opportunities will start flowing to you in abundance.

Istvan (Steve) Preda

Istvan (Steve) Preda

ispreda

Strategic Advisor and Investment Banker who helps companies grow, groom and get great investors.
Comments (1) - We would like hear your opinion too!
  1. Very well stated and is as accurate a statement on the subject as I have seen written to date.

    Don’t try to beat them at their game, join them. It’s faster, easier and far more productive.

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