I am part of the financial markets. I am proud of that. Over the past five years I have been involved in a number of groups raising money for green power and trading renewable energy. My latest is raising money to finance energy efficiency - spending money to cut consumption. All good. But I see similarities between the bad clients and the current primary race.
The first rule of dealing with someone developing a project is to get them to understand two simple truths - "It is better to have 15% of $50 million than it is to have 100% of 2 million" and "There is a cost to getting to where you want to be".
The comparisons below the fold:
Had a client who wanted to build a green project - what is not relevant. I went out and convinced someone to invest over $20 million dollars in their project - not a loan but money they would risk. I had an agreed to fee. The CEO of this company came back and said "I'm getting less cash out of this than you are, either cut your fee or I won't do the deal."
Now it is a fact of life that the middle man always gets squeezed in the end. If the project needs a little more oompf to get over the finish line, the fund raiser gets squeezed. But they get squeezed only to the extent necessary. You never take an early cut because that means the final cut just comes out of a smaller number - not that the cutting is done. I said no - I was looking at easily six more months of uncompensated work before everything closed and I found out how much more of a cut I had to take (and I had other paying work I could go do) - and the investor walked away from the squabble. The deal got done with someone else two years later. And the project lost over $50 million in profit in that time and now may never be successful.
So, the analogy - one person in the organization killed a very profitable deal because he saw only someone else was doing better than him NOW. He ignored the fact that overlooking that slight would have made this person easily 20 times the amount of the difference he was arguing over.
The other problem was that this company could not accept that they shouldn't own the majority of the new project. They had spent four years sweating over the project. They had invested well north of $1 million. They felt they "deserved" the majority.
But the investor was being asked to risk 20 times that amount. The investor was willing to give the company a big boost in ownership after the investor got their money back. The investor was providing the new resources to get the project off the ground and successful - the company could not do it on their own. And the investor was willing to give the company the same terms on getting their money back as the investor was taking. Oh, and BTW, all the company officers were given a chance to have good paying jobs as well as getting their money back. But the company said they controlled the game or no one did
Moral: If you can't see the difference between what is good for your company - and you in the end - versus what is good for you now, you are likely to kill your own chances and the organization's chances.