Big Hairy Deal Hunting

““Think of M&A as having four quadrants defined by size and risk,” he said. “Big, low-risk deals are the ones everyone wants, but they don’t exist. Small, low-risk deals do exist, but you can’t make much money from them because of their size. Small, hairy deals are the worst quadrant, because the reward is limited and the odds are stacked against you, so why bother? The bingo quadrant is the big, hairy deals. If you can find a big, hairy deal with solvable problems, that’s where the real money is.””

“If you plan to do M&A, you have to rearrange your brain to lean into those big, hairy deals and figure out how to cut off the hair and de-risk. You’ll need to be flexible, fearless, and open-minded, and stay attuned to your internal chatter. This is where your rearranged brain is going to kick in and look for solvable problems in big, hairy deals. Figure out whether these are problems you can address, either by removing them or by quantifying them and living with them. If not, move on.”