How To Effectively Jockey A Major Business Deal

Every deal has a jockey.  The deal jockey is responsible for driving the business deal forward from inception to closing.  In particular, the jockey is responsible for the following:

  • Vetting technical issues with the relevant subject matter experts;
  • Ensuring the business stakeholders fully understand their options and the implications of their decisions;
  • Taking a key role in negotiations; and
  • Ensuring that the documentation reflects all of the parties’ decisions.

The best deal jockeys have done thousands of deals over the course of their career, and they derive huge satisfaction from closing a deal that is good for the business owner.

Should You Hire A Professional Deal Jockey or Try Doing It Yourself?

Typically, a business owner hires a deal jockey to handle an entire deal (the purchase of a company or asset, the renegotiation of a supply chain deal, a joint business venture, etc.).  But, if you are inclined to try your hand at jockeying the deal yourself, you can also hire a professional to just review the documentation or advise on critical negotiations, for example.  Be forewarned, however, that it is far more expensive to pay a jockey to fix a broken business deal than to do it right in the first place.  Not only does it take more time to fix the deal, but it also runs the risk of deteriorating the deal itself.  Before, you decide to try to jockey a deal on your own, ask yourself these questions:

  • Am I venturing into unchartered territory?  If so, an additional perspective may be invaluable.  Two heads are definitely better than one, especially for matters of first impression.
  • Are the risks associated with this deal (or failing to close the deal) severe?  Do not play with fire if you do not know what you are doing.
  • Do I have enough personal energy and resources to give to this deal? Often, business owners have better things to do than to jockey deals themselves.  Your focus should be on items where your time is best leveraged.
  • Do I need to preserve my present or future role as a collegial business partner? Even the friendliest deals can involve some aggressive pushing.  When they do, if you have to worry about preserving the relationship after the deal closing, then you may want to bring in a deal jockey to be the “heavy”.
  • Is the deal highly technical? If you are dealing with a regulated industry, a cross-border deal, litigation, or any one of a number of scenarios filled with potential landmines, you would be wise to bring in a deal jockey.  Whichever party has the most technically skilled deal jockey will often win the most deal points on a highly technical deal.
  • Is there a deal jockey on the other side?  If so, you do not want to be out-gunned.  Whether it is distasteful or not, a deal jockey is employed to get his owner the best deal possible.  If the jockey is facing down a lay person, he will take every possible advantage of their  lack of knowledge.
  • Will it be hard for me to remain objective on this deal? If you are emotionally invested in this deal, you definitely need a deal jockey.  A deal jockey’s role is to remain objective and look out for what is best for the owner.
  • Do I have exceptional drafting expertise? Deals are ultimately no better than the documents drafted to reflect them.  If you do not have deep experience drafting complex corporate or commercial transactions, you should, at a minimum, have an expert review them.

What are the characteristics of a good deal jockey?

If you choose to hire a professional deal jockey, make sure your jockey has the following:

  • Excellent credentials and experience. Past performance may not guarantee future performance, but it certainly indicates capability.  A deal jockey should have experience closing deals.  Big deals.  Important deals.  Complicated deals.  A good deal jockey will have a lineage of past clients and deals that are impressive.
  • Commitment to the business owner and the deal. Look for a deal jockey that is highly responsive.  If the jockey does not have time to give you priority in the midst of other work, then you should move along to someone else.
  • Confidence without cockiness. You cannot afford a jockey that is timid – your jockey will get eaten alive in the deal.  More importantly, you cannot afford a jockey that is arrogant – you will get eaten alive in the deal!
  • Role clarity. A deal jockey should know when to defer to the business owner and when to take a tactical lead.  There are a surprising number of jockeys out there who think they are smarter than the business owner and should be making the decisions.  If your potential jockey does not know his role versus your owner role, scratch him off your list.
  • Deal jockeys that have integrity are respected by their peers and by the counter-party.  During the deal, their actions build trust not unnecessary antagonism.  That trust will pay dividends for you, the business owner, throughout the deal.
  • Win-win focused. Professional deal jockeys know that the most sustainable business deals are ones that are a win for both parties.  Sure, deals can be contentious and not everybody is going to get what they want.  But, winning deal points to fulfill an ego trip does not serve the deal well.  The key is to try to find wins for the counterparty so they are more willing to concede the big ticket items your side really needs.
  • Willing to get into the weeds. A good deal jockey will put a significant amount of effort into understanding every facet of the deal.  They do not waive the “not my area” white flag.  Even when they are not an expert in a hyper-technical area being reviewed by another member of the team, they will make the expert explain it until they can at least understand the concept.  Any area a deal jockey is not willing to gain a solid conceptual understanding of is a point of weakness that will be exploited by the counterparty.
  • Ability to see around corners. A good deal jockey can anticipate the future risks associated with specific deal points and mitigate those risks during the deal.
  • Ability to modify a strategy in real-time.  Deal negotiations develop in real-time and strategies must flex to optimize the chances of success.  If a deal jockey is too rigid to let the strategy flex, it will hurt the outcome.
  • Realistic about worst case scenarios. Deal jockeys need to be able to envision what may go wrong after the deal is implemented.  More importantly, the jockey needs to be able to build an exit strategy into the deal so the owner is not trapped when unforeseen circumstances occur.
  • Sensitive to the optics. Deal jockeys care about how the deal will be perceived by the outside world.   The deal may eventually be viewed by a regulator, judge/jury, shareholders, or the general public.  You need to be careful when documenting and negotiating the deal to ensure that it is viewed in the proper light.  Careless drafting or communications can give a devastatingly wrong impression.
  • Ability to work with a cross-functional team.  Complex deals may involve accountants, lawyers, tax professionals, scientists, engineers, and dozens of other potential technical experts.  A deal jockey needs to be able to integrate these various components to put together a favorable deal.

Our lawyers have deep experience jockeying major deals for prominent companies.  If you need assistance, please contact us.