So it is said, so shall it be done
Posted by austin under Entrepreneurs, Startup Resources
I’ve always been an optimist. I think every entrepreneur needs to be an optimist to be 
able to confront the day to day opposition they will face.
When customers have told me a deal was done, I use to assume the deal was done.
When investors told me that we had a deal, I once believed we had a deal.
This worked well the first few times - then I got a great dose of reality.
Deals are never done. Even once the contract is written, the partnership is just beginning. In today’s litigious society, there is always a reason or clause that allows someone to reopen and question most contracts.
One of my favorite lessons on this was early in my career at Total.Net. This was in 1996, and thanks to a few disastrous IPOs (iStar Internet and Hookup Internet) the market for raising funds for ISPs was awful. We had cut back staff and were getting close to being profitable. We had raised a million dollars at a critical time from a New York investor who was the CEO a large public Internet company and worth half a billion doallars. We had a signed term sheet and started to celebrate.
After 48hrs without receiving the confirmation of a wire transfer, we got a call to turn on CNN. He was being led out of his house by the FBI after being caught getting ready to flee the country with hundreds of millions of dollars in pilfered funds. His company had faked most of their sales. It may be obvious, but our deal didn’t close 
So tonight on CBC’s Dragon’s Den show entrepreneurs will get to see that deals are never really done. I found out a couple of weeks ago that the deal I critiqued in my earlier post on the Dragon’s Den didn’t end up closing. I still don’t know the details of why the Jobloft deal didn’t close (watching the show right now) but I think this is a great lesson that deals are never really done.
I’ve also had signed deals that have ended up in litigation - so remember - if you happen to be Pharaoh then you can follow the “So it is said, so shall it be done” motto. For the rest of us relationships need to be nurtured and worked on in detail both before and after a deal is done.
Update: The Jobloft team have posted their own comments on their deal not going through. It’s worth a read.
Posts (RSS)
November 22nd, 2006 at 10:20 pm
First off, I want to congratulate the the guys from Job Loft for such a grand yet simplistic idea! I have watched the Dragon’s Den conclusion and am very surprised with the end result. Personally, their professors did have a point of 200K being too low of an investment, BUT that being said, the mistake that the Job Loft made was that they never did negiotate and come to some type of agreement! Instead of sitting around the table not putting their two cents was a very bad business move as far as I am concerened. Again, lessons are ALWAYS to learned and this was a prime example of this.
November 23rd, 2006 at 6:03 am
Hi Austin,
Thanks for sharing your Total.Net story. It must have sucked when you found out your source of problem from CNN!
Love to hear your take on Jobloft deal break down based on what transpired and shown on TV.
Here is my take on things, (just my 2 cents, not much more)
I am going to contact JobLoft later and see if I can find out more straight facts. Will see.
Kempton