BOARD OF DIRECTORS IN 30 DAYS
Financial institutions are begging to give you money.
FIRST, YOU’LL NEED A TOP-TIER TEAM OF ADVISORS, ACCOUNTANTS
AND LAWYERS TO GET THE FINANCIAL INSTITUTIONS TO GIVE YOU THE
CAPITAL YOU NEED TO CLOSE YOUR DEAL. THIS ARTICLE IS THE FIRST
OF FOUR THAT WILL COVER SOME APPLICATIONS OF DAN PEÑA'S QLA
(QUANTUM LEAP ADVANTAGE) METHODOLOGY FOR GENERATIONAL
WEALTH CREATION – GROWTH THROUGH ACQUISITIONS.
Dan Peña is known as the "Trillion Dollar Man," for creating, millions, 10s of
millions, 100s of millions, billions, 10s of billions and 100s of billions of equity
and value through his mentees and devotees (students and followers). Dan's
methodology is based on actionable steps. Each step builds on top of the one tha​t
came before. Failure is clear and ​success is measurable​. This series of articles will
focus on just four parts of QLA.
PART 1: BUILD A TEAM – TRADE EQUITY​. Don’t hire credentials; hire
attitude. Lead by example, delegate responsibility, encourage action and
pay your team well. You don't need to know how to do it all, but you need
a team that does.
PART 2: SECURE ACCOUNTANTS AND LAWYERS – ON SUCCESS FEES.
All large firms do delayed fees; everyone is paid on close. Offer a bonus on
success and discount on busted deals. Only work with the best. Top 10 or Top 25
or Top 50.
PART 3: FIND A DEAL – IT'S A NUMBERS GAME​. Contact and close
acquisition candidates, even when they don’t want to sell. It's not a deal if the
financials don't work; free cash flow must cover debt service. Always talk to the
decision maker.
PART 4: FINANCE YOUR DEAL – INTERVIEW BANKS.​ If you are asking for
money for today, it is too late, you are wasting your time. Practice, practice,
practice. Everybody gets turned down for financing – even Dan Peña and Donald
Trump.
Dan's thoughts on building a team:
"Directors are your first and most immediate requirement...
Select an experienced chairman first, an individual with an established
reputation, though not necessarily in your own industry. Your chairman
should be, to the fullest extent possible, an executive heavyweight, a highly
experienced person...
The rest of your board positions should be filled with individuals from
varying backgrounds who share one common quality. They all have more
business and financial experience and acumen than you. Your board
ideally should include a financial person, an accounting specialist, and
one or two other individuals..."
Excerpts from Dan Peña's seminal book​, ​Building Your Own Guthrie // Your
First 100 Million
There has never been a time with more available capital.
The chairman and board of directors (your advisors) will NOT be involved in day
to day operations. You should have about one meeting per year with the entire
board. Although you may end up working closely, you should ask for and expect
no more than 5 hours per week from non-executive directors.
Perception is reality. Your team adds credibility to your deal. Raising​ capital is not
easy and without a team it is a lot harder. Dan says, "you cannot make a Quantum
Leap if you don't share the wealth with your team and employees – be it cash,
equity, options or warrants that are tangible rewards for performance and loyalty."
SEVERAL BASIS POINTS OF FREE FOUNDER'S EQUITY IN EXCHANGE
FOR TIME IS VERY TEMPTING. SET THE EXPECTATION THAT NO ONE IS
PAID UPFRONT, BUT IF THE DEAL SUPPORTS IT, EVERYONE CAN BE
PAID ON CLOSE. REMEMBER THAT 70% OF SOMETHING TANGIBLE IS
BETTER THAN 100% OF YOUR IDEA ON PAPER?
My first exposure to Dan Peña was a random clip from his appearance on the ​Joe
Rogan Experience​. I couldn't get enough and knew immediately that I wanted to
learn directly from him. In May 2017 I reached out to Dan's "crack staff" to sign up
for a seminar. Three month later I was standing in front of Guthrie Castle.
Several times a year a determined two dozen make their journeys to Scotland from
around the world for a single week of intense training and immersion. Dan calls
this the Quantum Leap Advantage Castle Seminar where he teaches generational
wealth creation within a fraction of the time normally required.
The grounds of Guthrie Castle are immaculate and include: a nine hole golf course,
snooker room, trophy room with animal heads, turrets, a library, a consecrated
church, two gyms and eight guest houses. Those that are accepted into the week
long seminar stay in the castle guest bedrooms or the quest houses nearby. My wife
and I stayed in a small two story cottage with private access to an incredible walled
garden (access otherwise restricted)​.
Everything in Guthrie runs like clockwork, though Dan complains that something
breaks every day in a 450 year old castle. The staff serves every, multi-course
meal, on queue, menus in advance. While we waited for dinner, butlers asked to
refresh our drinks. Every few days, the grounds staff manicure the estate, gardens,
and golf course.
How to secure Top-Tier directors for your Board.
Out of the 22 that attended the August 2017 QLA Castle Seminar, just 6
successfully completed the year long mentor program. Starting on the first week, a
steady drip of dropouts and expulsions continued through to the very last Zoom
call. I barely managed to make it through, finishing with two of three strike.
Although I completed the program, I am sure I would not have made it if Dan had
not cancelled (no less than) a third of all weekly reports and monthly calls.
* I believe Dan changed the mentor program in 2019, from 1 year to 90
days.
I'm not initiative challenged and I don't need to be externally motivated. This
definitely made certain steps in the program easier to complete. Be it because I was
immersed in QLA methodology, Dan's formal mentorship or my experience
running corporate on-boarding teams, I turned the process into a sales funnel and
took advantage of my marketing background.
Truth be told – the team building step was and remains the easiest in the process.
However, it was not until I completed the year long program that I realize that
while the bulk of QLA devotees fail before getting started, the bulk of Castle
Seminar attendees fail to get past the step that follows.
I don't personally know Dan's rockstars. I don't know what or how they did it. I
don't know what they said or what terms they negotiated. This is how I did it... how
I put together my first team of directors in the Fall of 2017:
* Since the August 2017 Seminar, Dan has added additional "NOTES,
LETTERS, SCRIPTS, AUDIO/VISUAL AIDS AND BUSINESS PLANS OF
PREVIOUS PARTICIPANTS."
STEP 1: CONNECT WITH MANY CANDIDATES
LinkedIn is by far the best available tool for building a team of professionals​. As a
social network it is unlike all others because of the quantity of people posting or
searching for opportunities. You may be surprised by how many qualified
individuals are out there. On the other hand, end up taking weeks to build up your
network.
Your first step in building a team is to expand your network and connect with
candidates.
SEEKING A VETERAN LEGAL DIRECTOR FROM A TOP-10
INTERNATIONAL LAW FIRM? DOES LOCATION MATTER FOR THIS ROLE
(IE. YOU'RE IN CHICAGO AND HE'S IN LA)? EXECUTIVE OR
NON-EXECUTIVE ROLE? RETIRED, CONSULTING, FULL-TIME?
You're going to send a connection request to everyone with partner or director in
their job title, past, current, retired and not. As your network grows you'll see more
and more candidates. Invite everyone you can; ​the connect request button is often
hidden in the "more" dropdown​.
You may need to start at the bottom, connect with associates and work your way
up to managing partners. You may need to connect with your target's network or
everyone in their office before they accept your request.
Quality does matter, but quantity is also important. An effective strategy is to focus
on quantity until 500 connections are reached, then focus on quality. In the long
run, it doesn't matter. Connect, Connect, Connect.
HOT TIP: ​Add a custom message to each connection request and you'll get
a notification+message each time someone accepts.​
Can't find who you're looking for? Try Premium / Paid LinkedIn / 30 Day Trial.
[This is not an ad, but I'll take the commission – contact me]
STEP 2: SEND OUT MANY MESSAGES
If you followed Step 1 you're going to have no shortage of phenomenal
connections. Quickly check if there is a general match for what you're looking for
and send them a "short" message with just a few lines: (1) mention that you are
reaching out regarding a potential directorship; (2) add a sentence about your your
exceptional idea; (3) offer to share more info via email.
Don't skip this step and cold email candidates ​more info without their consent. This
will backfire in virtually all situations. You should message, followup as needed
and continue to add connections. Your goal is to send out lots of more-info emails.
Send, send, send.
Focus on quantity.​ At this stage neither side has committed to anything. If you
realize that you've made progress with the wrong candidates say something along
the lines of, "we've made a decision to go in another direction" and thank them for
their time or interest.
STEP 3: SEND 10+ "MORE-INFO" EMAILS (per position)
If a 'qualified candidate' agrees to connect with you and agrees to receive an email
with more info, you have​ about 50/50 chance of getting a phone call​. Don't screw
this step up. All you have to do is send a 'brief' email explaining your idea, offer to
schedule a call to discuss and attach a document outlining your business idea
(attach either a​ 1-2 page 'executive summary' or 5-10 slide 'executive deck​'.
State that you "see a tremendous opportunity" with an 'exit' on the horizon.
Mention an industry specific shift or paradigm. Include your objective (to build a
team) and your role (can't help you here). Mention that the attached document will
provide more details. Close by offering to schedule a call to discuss further.
STEP 4: SPEAK WITH 3+ CANDIDATES (per position)
Be it over the phone, video or in-person, you are not going to convince anyone of
repute or secure anyone that will add value via text, chat, or email. No heavy hitter
will risk their ​20, 30 or 40 years track record​ if s/he does not hear your idea from
your mouth. Top-Tier candidates are effective professionals, usually with
significant experience interacting with peers. In other words, they know how to
play well with others and move towards their own interests.
This step is your sales pitch. A phone call is the easiest path and an in-person
meeting can be the most effective. Either way – script and practice, practice,
practice.
HOT TIP: ​Whether you are in a high rise office or in your basement, do not
forget you are conducting the interview.​
Take the lead during the call. Start by thank them for jumping on and confirm that
the "additional materials" you sent in advance were reviewed. Then go through the
call's agenda: (1) about yourself and business idea; (2) about their backgrounds; (3)
questions for you. If you do everything correctly, just about any director will say
the magic words, “how can I add value?” or "how can I help?"
HOT TIP:​ ​Use your script, take notes and STFU and listen​!!!
Thank them for taking the time to speak with you. Inform them that you'll follow
up within the next two weeks and offer to be available for additional questions.
STEP 5​:​ MAKE DECISIONS and NOTIFY EVERYONE
There's never an easy time to make a hard decision. If made it this far by following
the steps, at least, you'll have great options to chose from. These numbers are of
course approximates, but talking to three candidates (for the same position) will net
you at least one candidate that will be available and qualified.
HOT TIP: ​Don't wait longer than needed between steps. Send out more info
and schedule calls as soon as possible. This is a first-come, first-served
sales funnel.​
After you talked to several candidates, compare and make decisions. Start by
sending your top candidates emails offering them positions. If they turn you down
and there were no misunderstandings, move to your runner-up or continue the
search. After all the positions are filled, send the remaining candidates emails
letting them know you went in another direction, but would love to stay in contact
and potentially work together in the future.
HOT TIP: ​Always keep the door open and don't burn any bridges you can
avoid. In case your top pick doesn't work out, you should have backups​.
PART TWO OF FOUR WILL COVER HOW TO SECURE TOP-TIER
ACCOUNTANTS AND LAWYERS ON SUCCESS FEES – SO YOU DON'T
HAVE TO PAY THEM OUT OF POCKET BEFORE YOU CLOSE YOUR FIRST
DEAL.