I was on the phone with an old friend last week. We were talking about a few things around a negotiation, and he said something profound.
I loved this phrase. I learned this value from Len Fassler and Jerry Poch in 1993 when they acquired my first company. I had never bought, sold, or invested in anything up to that point. My partner Dave and I were clueless about selling our company, so it would have been easy to take advantage of us. When I reflect on the deal that Len and Jerry offered us, it was fair and reasonable. There wasn’t much of a negotiation as they knew what they were willing to pay for a business like ours. Instinctively, we knew their offer was fair and reasonable.
At the time, I struggled mightily with the offer, wanting to sell the company on Monday, Wednesday, and Friday. I didn’t want to sell on Tuesday, Thursday, or Saturday. On Sunday, I rested. Dave got very frustrated with me but hung in there. Len and Jerry didn’t change their price or the terms but said the offer was available for however long we wanted as long as our business performance didn’t change. Six months after they made the offer we accepted it.
When I reflect on this 25 years later, they were fair and reasonable. And it set the tone for all of my future deal activity, whether I an investor, a buyer, or a seller. While I’ve dealt with all styles of negotiators, complex multi-party negotiations, and circumstances around all aspects of deals, I’ve always tried to bring the concept of fair and reasonable to the table.
I don’t like the cliche “always leave some money on the table.” I don’t like approaching things as a win-lose or win-win, where the concept of win dominates. I don’t like the statement “that’s what the legal docs say” as that’s a similar cop-out to the phrase “that’s market.” I’m not a fan of histrionics, table pounding, demands, head fakes, lies, and hiding behind — well — anything.
But it doesn’t matter that I don’t like these things or am not a fan of people who lead with them in negotiations. I’ve accepted that everyone has their own style and approach, independent of how I’d like them to behave. Instead, I’d rather approach everything from a perspective of being fair and reasonable. If we can’t get to a deal, so be it. If the other party doesn’t think I’m being fair and reasonable, I’m happy to listen to their explanation why and reconsider my position.
One of the benefits of this approach, at least for me, is that I can make decisions very quickly. I don’t have to do a bunch of analysis. I don’t have to check with lawyers. I don’t have to worry about whether I’m making the right call. While I’ll obviously make some decisions that are wrong and end up with deals that don’t happen, I’ll always feel that I’ve been fair and reasonable.
I think that’s a fair and reasonable approach.
Originally published at Feld Thoughts.