Deal Structure, Distribution and What Wins With Investors
Top Investor Insights from the Event: Deal Structuring, Distribution & What Actually Wins
Founders, sponsors and fund managers who raise capital and want to rethink deal structure, distribution and how they present to investors.
In their words
"Optionality in your deal structure is security against volatility."
"Mediocrity is the enemy. No one wants to look at a mediocre deal. No one wants to back a mediocre entrepreneur. Everyone wants to back winners."
"If you confuse people, they're not going to sign the documents. You have to keep it simple."
What you will hear
Richard C. Wilson cites a sports betting platform that he says sold for a billion dollars while its founders left with nothing. Richard C. Wilson uses that example to argue that structure deserves real thought. He says many people who raise capital accept the usual answer without giving it much thought.
The talk is a recap of speaker notes from a two day investor event. Other points include locking up distribution, using LP checks in a transparent way to win business, and avoiding mediocre deals. Richard C. Wilson also covers one-liners, a list of 30 investor questions, AI tools, and the club's upcoming summits and webinars.
From the source
- A panel example in the talk said a company could sell for $90 and the founders would take home only $2.
- The one-liner tool mentioned in the talk uses 25 guidelines to judge how a project is described.
- The $100 million summit is planned for July 16 in North Dallas, with about 25 speaking slots for 10-minute talks.
Sources
From Richard C. Wilson's Centimillionaire Strategies YouTube channel: Top Investor Insights from the Event: Deal Structuring, Distribution & What Actually Wins. Quotes come from the video captions, lightly edited for readability. Figures are the speakers' own estimates and experience.
General education only. Not legal, tax or investment advice.
Talk to a securities attorney to explore options around deal structure options, preferred return terms and LP investment disclosures. Do not use AI to write your own legal agreements.
Five points worth keeping
- Structure can beat strategy. A panel point was that a company could sell for $90 and the founders take home only $2. Richard C. Wilson described a sports betting platform that sold for a billion dollars and left its founders with nothing, which he used to show why structure deserves careful thought.
- Build optionality into deals. Marcus said having options in how a deal is put together can help against volatility. Richard C. Wilson adds that with the world changing more than ever, this is a time when many people want more flexibility in how they put deals together.
- Lock up distribution and choke points. Danny talked about dominating distribution, including using your own LP check in a transparent way. A unique offer, strong deal flow and a unique structure are harder for others to copy.
- Prepare 30 questions and answers. Richard C. Richard says many people raising capital lack a one-pager, a one-liner and a one-minute video. Writing out 30 questions a sophisticated investor should ask, with all 30 answers, shows transparency and that it is not your first rodeo.
- Show speed and avoid mediocrity. William said mediocrity is the enemy, and investors want to back winners with momentum. Brian's point was that many people talk, so investors look for those who execute and get more done with each update.
Related questions
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- What is a most favored nation clause for investors?A most favored nation clause, or MFN, says that if the sponsor gives another investor better terms, you can ask for those terms too.
- What is the difference between a convertible note and a SAFE?A convertible note is commonly described as a loan that later converts into equity, often with interest and a maturity date.
Questions about this video
Why does deal structure matter so much?
The talk says a company could sell for $90 and the founders take home $2. The talk cites a sports betting platform that sold for a billion dollars and left its founders with nothing, as an example of why structure deserves careful thought.
What should someone raising capital have ready?
A one-pager, a one-liner and a one-minute video. The talk also says to write out the 30 questions investors should ask and provide all 30 answers.
How should deal structure tools be used?
The talk says to use the AI deal structure tool to brainstorm, then bring the ideas to a real attorney. It also warns to keep structures simple, because confused people will not sign the documents.
Put this into practice with the one-liner builder. See all deal structuring resources.
