I developed these principles as part of my brokerage activities in order to minimise risks and maximise results.
They allowed me to attract high profile people in different geographies, gain their trust, and get top business opportunities.
The more I gain experience the more I improve my decision-making principles, as trust is fundamental in deal making.
Advisor: reputational risk.
Broker: time, reputational risk, and circumvention risk.
Trader: commercial risks (e.g., price, volume, etc.).
Producer: capital risk.
The client complies with the law.
I have a direct access to the client (e.g., seller, buyer, or decision-maker).
I get the mandate, right to information, KYC, PoF, PoP, etc.
My compensation includes:
Capital expenditures (e.g., creating a new company, etc.);
Operational expenditures (e.g., travel expenses, etc.);
Fixed compensation (e.g., retainer fees, etc.);
Variable compensation (e.g., success fees, stock-options, equity shares, etc.).
Meta-motivations:
Freedom.
Increase it.
Do not decrease it.
Be professional:
Anticipate.
Be objective.
Comply.
Communicate.
Be honest and transparent.
Separate professional and private lives.
Maintain excellent relationships with all stakeholders.
Make friends.
Do not make enemies.
Protect the client:
Protect confidential information.
Be result-driven.
Perform actions which increase the likelihood of the deal to get closed:
Organise (video) calls between the buyer and the seller.
Arrange in-person meetings between the buyer and the seller, etc.
In case of any conflict of interest between your client and your personal contact representing the counterparty, the priority should be protecting your client (i.e. fiduciary duty, variable compensation, etc.).
Should a broker provide exclusivity on his/her client to the counterpart broker? No, as:
It opposes the fiduciary duty.
In case of success via another channel, the initial broker will always have the financial capacity to compensate the counterparty broker (e.g., friend, relative, etc.).
Protect the middle-men (e.g., brokers, etc.):
Minimise the reputational risk:
The seller has the product (i.e. Proof of Product).
The buyer has the money (i.e. Proof of Funds).
Have direct access to the client (e.g., buyer, seller, or decision-maker).
Work with great companies (i.e. audited financial reports, credentials, professional online communication, etc.).
Work with great people (i.e. reputation, track record, credentials, deals, recommendation, etc.).
Minimise the circumvention risk:
Keep all the brokers in the loop, mention them as CC in mails, LOI, etc.
Sign the Non-Circumvention & Non-Disclosure Agreement (NCNDA).
Sign the Irrevocable Master Fee Protection Agreement (IMFPA).
Sign the Memorandum of Understanding (MoU).
Sign the Memorandum of Agreement (MoA).
Create a Joint-Venture company.
Become a trader.
Become a producer.
Additional principles:
Be equitable, as the more one takes risks and contributes to the collective success, the more one should be rewarded.
Do not seek profit at all costs. For example, friends, business relationships [...] are more important than money and short-term gains.
Aim for the consensus. If it’s not possible, then exit the project, and leave the involved parties on good terms.
Limitations:
In the end, all the parties have to secure their own interests by themselves. I do not guarantee anything to anyone.
The “Me, myself and I” principle can prevail under certain circumstances.
A deal requires significant time to be executed and closed. During the deal execution period, any party may delay his/her answers, change his/her mind, retreat, etc. So, it is always important to have a leverage on decision-makers. Brokers are well-positioned to ensure that role. So, there is no (?) interest in circumventing them.
Companies operate over the long term, and initiate deals often times. So, performing brokers are assets to them, and they must strive to retain them.
Companies run reputational & legal risks.
However, the circumvention risk always exists, that is why no party should underestimate it.
LOI ideally needs to be addressed directly to the seller, decision-maker, great companies, high-profile people, etc.
This is an example of an acceptable email: firstname.lastname@companyname.com
LOI addressed to middle-men usually does not work.
Buyers usually work on the bank-to-bank basis via the SWIFT system.
BG, LC, SBLC, Escrow, etc.