Deal Efficiency: How to Avoid Managing the Deal through Email and Excel

M&A bankers are often heard developing their own version of the 80/20 rule. The 80 is the “heavy lifting” identified as the boring process, document handling and deal management but carried out by expensive professional staff. The 20 is the glamorous world of positioning the target, buyer identification and negotiation.


12 September 2013

Avoid managing a deal through email

What is the true lesson of Cinderella today? Could the Prince have found Cinderella using social media? Or perhaps a dating site with specific shoe criteria? Cinderella’s step-sisters might have benefitted from cosmetic surgery or photoshopping. Unfortunately, Cinderella was left doing the heavy lifting because switch-operated automatic fires were not available. In other words, sensible technology can free us from the mundane and tedious, for the important high-value business of life.

To bankers everywhere: you can go to the ball (do more deals or marketing, play a round of golf or just sleep) and still do a great job, more efficiently and more securely for your client. Read on.

M&A bankers are often heard developing their own version of the 80/20 rule. The 80 is the “heavy lifting” identified as the boring process, document handling and deal management but carried out by expensive professional staff. The 20 is the glamorous world of positioning the target, buyer identification and negotiation.

To put it another way, in a notable understatement, “not everything we do is clever.” That sounds like the opener in a light bulb joke, but the reality is that bankers really do use five to do the job of one. The tools to change that are already developed, proven and available today.

The heavy lifting is a dark ugly secret which is kept away from clients for good reason. A huge amount of the deal cost is hidden, along with a whole set of disconnected manual processes input by expensive analysts and checked by managers. The future is all around us in an integrated suite of deal management tools, but the M&A market is a supertanker which takes time to change direction.

The processes are some combination of the following:
- Research buyer list
- Identify contact person
- Collect contact information
- Create Excel spreadsheet
- Input all relevant information
- Construct email
- Make contact (solicit) by email
- Hope your email attracts attention
- Wait for response
Re-contact (solicit)
- Note dates of contact and re-contact on Excel spreadsheet
- Receive emails from colleagues about separate contacts they made
- Wait for signed NDA to be returned
- Send Information Memorandum as email attachment
- Update all events manually in Excel
- Report progress to client

I’m reminded of a visit to a warehouse years ago after the introduction of scanning technology. The manager excused the system as “handamatic”, polite language for scraps of paper on a cork board. The most one could say is that it worked. The unreformed M&A process is not so different from this. It is the last vestige of handamatic.

Deal management has not moved with the times. Putting aside all thoughts of efficiency and cost saving, an email attachment is not much better than a postcard in the ordinary mail. The security issue alone should be a major concern. It is a quirk of human psychological behavior that long-standing hazards are frequently downplayed as wallpaper, whereas anything new is given disproportionate weight. Making any change is going to be an uphill battle.

Why has so little changed? The answer is a combination of herd protection - “everyone does it” - and the standard of proof which the industry needs before changing its ways. Nobody would go back to paper data rooms now, but 15 years ago you would have been mocked for suggesting an online version.


We at Intralinks Dealnexus cannot help with shoes, but we can provide the locked down 21st Century carriage; complete with our own version of timed document degradation, without all of the pumpkins.Perhaps it is fitting that the pioneer of the virtual data room developed the online space for M&A professionals through an environment built to VDR standard. Dealspace, inside of which there will be not only a VDR, but also an integrated suite of matching and deal management tools through the Dealnexus integration, is built on a common platform with (breathe a sigh of relief) a single log-in. Within the platform, buyer lists can be built from real-time declared interest, contact is made or enabled, and documents are released for viewing. Every step is recorded, so a full multi-view report is a click away. Everything updates seamlessly. You control who sees what. You know who sees what. All dealings are in one place. The whole environment is at VDR standard, backed by Intralinks.

We all know the groupthink dangers of the Emperor’s new clothes. Cinderella at least went to the ball properly, benefiting from decent shoes and a gown. Bankers look better in good shoes and clothed in decent security technology, rather than risking baring it all behind the gossamer-thin protection of standard email.