Deal Structure and Scaling Within a Multi-Million Dollar Company

To be successful as a multi-million dollar organization, you need a strong structuring strategy and scaling strategy. By doing this, you will be able to close more deals, grow your business, and keep your profit margin up.

If there’s someone who knows this all too well it’s Dan Fleyshman. He’s a serial entrepreneur, as well as the youngest founder of a publicly traded company.

Having sold $15 million worth of clothing in six department store chains at the age of 23, he went on to license his energy drink “Who’s Your Daddy” into 55,000 retail stores and military bases.

Aside from co-founding the “100 Million Mastermind Experience”, he has spoken at over 200 business events, invested in 36 companies, and his company, Elevator Studio, has spent more than $60 million on influencer marketing with fashion brands, film studios, mobile apps, and consumer products.  His Victory Poker site was launched in 2010 and he built the third largest team of professional players of all 550 poker sites worldwide.

But, that’s not all. Dan Fleyshman is a passionate philanthropist as well. His charity, www.modelcitizenfund.org, provides homeless people with backpacks filled with over 150 emergency supplies.

In this blog post, we’ll cover the key elements of a solid deal structure, as well as tips on scaling your business effectively and staying on top of things without compromising your time.

Types of Deals

A multi-million-dollar company may deal with a small-scale contract with a vendor or conduct a multi-billion-dollar merger and acquisition. A multi-million dollar business may encounter the following types of deals:

Mergers and Acquisitions (M&A)

An M&A deal involves the merger of two or more companies. Although M&A deals can be time-consuming and complex, they can also be very rewarding for both parties. The acquiring company can expand into new markets, acquire new technologies, or eliminate competitors through M&A deals.

As for the target company, an M&A deal can provide access to additional resources and capabilities, or allow shareholders to receive a cash payout.

Joint Ventures

A joint venture is a partnership between two or more companies to achieve a common goal. In joint ventures, new products and services can be developed, new markets can be entered, or resources and costs can be shared.

For large companies looking to reduce risk and gain access to new expertise, joint ventures can be a useful strategy.

Strategic Partnerships

Unlike joint ventures, strategic partnerships are usually less formal and less complex. In addition to cross-selling products and services, strategic partnerships can also be used to share marketing and sales resources and develop new products or services.

A strategic partnership is an effective way to expand the reach and capabilities of multi-million dollar companies without investing a lot of money.

Dan did this with his company, Card & Coffee. Strategic investors were important for this business, and it wasn’t about the money, it was about the people. “So, I was like the owner of Forever 21 and the guy that owned 6 million square feet in New York and sports team owners and executives and Post Malone’s management, like all these interesting characters were the investors,” he adds. “And then that’s when it became scale time.”

Licensing Agreements

In licensing agreements, an organization can use intellectual property belonging to another, such as a patent, trademark, or copyright, to benefit its own business. Licensing agreements can be used for generating revenue from unused intellectual property or for gaining access to technologies that are too expensive or difficult to develop internally.

In addition to expanding their product offering or entering new markets, multi-million dollar companies can benefit from licensing agreements.

In one of Dan’s public companies, he had a licensing agreement with Starter Apparel. “Starter was a great company for us”, he explains. “Our company paid $9.5 million over three years just for the UK, and we got full rights to whatever they designed”, Dan adds.

Distribution Agreements

In a distribution agreement, one company sells the products or services of another company. By establishing distribution agreements, you can reach new markets and increase sales of your products or services.

Companies with multi-million dollar sales and marketing infrastructure can benefit from distribution agreements by expanding their reach without having to invest in their own sales and marketing systems.

Supply Chain Agreements

Contracts between companies and their suppliers are known as supply chain agreements. It is possible to use supply chain agreements to ensure the supply of raw materials or components, or to ensure that products are manufactured and delivered on time to the customers.

In order to maintain efficient and reliable operations, multi-million dollar companies need supply chain agreements.

Research and Development Agreements

A research and development agreement is a contract in which two or more companies collaborate to develop new products or technologies.

Multimillion-dollar companies can reduce risk and share costs by entering into research and development agreements.

Manufacturing Agreements

A manufacturing agreement governs the production of a company’s products by a manufacturer. Manufacturing agreements can be used to reduce manufacturing costs or to gain access to manufacturing expertise that would otherwise be too costly or hard to acquire.

Multimillion-dollar companies can take advantage of manufacturing agreements by focusing on their core competencies and outsourcing non-core tasks.

Service Agreements

An agreement between a company and a service provider specifies which services the provider will provide, such as IT support, customer service, maintenance, etc. In addition to freeing up internal resources, service agreements can provide access to knowledge that is difficult to develop in-house or is too expensive.

Multi-million dollar companies can benefit from outsourced service agreements by focusing on their core competencies.

Consulting Agreements

Generally, consulting agreements are made between a company and a consultant who provides temporary advice or services. An outside perspective on an issue can be obtained through consulting agreements, which can be useful for gaining access to expertise that would be hard or expensive to develop in-house.

A consulting agreement can be a good way for companies with multi-million dollar projects to receive assistance on a specific issue.

Non-Disclosure Agreements (NDAs)

The purpose of NDAs is to keep certain information confidential between two or more parties. It is common for NDAs to be used with other kinds of deals, such as licensing agreements, joint ventures, and strategic partnerships. Multimillion-dollar companies can protect their trade secrets and other confidential information by utilizing NDAs.

A multi-million dollar company may also encounter a variety of other types of transactions, such as asset sales, financing deals, and intellectual property transfers. It depends on the specific circumstances and needs of the company and what type of deals it encounters.

Tips for negotiating successful deals.

Being prepared and understanding your goals and objectives is crucial when negotiating multi-million dollar deals. Flexibility and a willingness to compromise are also essential. To help you negotiate a successful deal, here are some tips:

• Do your research. Understanding the other party’s business, goals, and needs is essential before entering into any negotiation. By doing so, you’ll be able to develop an effective negotiation strategy.
• Focus on deals that you can help with. For instance, Dan doesn’t take deals he cannot help, no matter how good the money is. It is impossible for him to help a company that does heart surgery if it is in the medical field.
• Be prepared to walk away. Be prepared to walk away if you are unhappy with the terms of a deal. As a result, you will demonstrate to the other party your commitment to your goals and your unwillingness to compromise.
• Be flexible. However, negotiating also requires flexibility and compromise. You do not have to give up your goals, but you must be willing to meet the other party halfway.
• Build relationships. Good relationships make negotiations more likely to succeed. Make sure you get to know and trust those with whom you are negotiating.
• Have investors lined up. In the Elevator Syndicate, I ask my friends to invest in water companies and restaurants, Dan states. Would you be interested? When they say yes, I send them wire information, when they say no, I don’t contact them again. Our investments have increased to $3 to $6 million a month, and we have raised $36 million in total this year, he continues. The funding takes two weeks, and my friends and followers are able to invest easily.
• Get everything in writing. As soon as you reach an agreement, you should put it in writing. Having this in place will help to avoid misunderstandings and disputes in the future.

When negotiating multi-million dollar deals, it is important to remember that both parties want to find a solution. It is possible to negotiate successful deals that benefit both you and your counterparty by following these tips.

Key Terms and Conditions

An understanding of the key agreement terms and conditions is essential when negotiating any type of deal. There are a number of terms and conditions to consider, including:

• Price. There is no doubt that price is one of the most important terms and conditions to negotiate. In order to negotiate a fair price, both parties need to understand what the deal means to them.
• Payment terms. It is also important to carefully negotiate the terms of the payment. You should know how much down payment you need, how many installments you will need, and what the interest rate will be.
• Term. In a deal, the term is the length of time the agreement is in effect. For the deal to be aligned with the company’s goals, the terms must be carefully considered.
• Termination. There should be a termination clause which outlines the conditions under which either party can terminate the contract. In order to avoid disputes in the future, you should understand the termination clause clearly.
• Dispute resolution. It is important that any dispute that may arise under the agreement be resolved according to the dispute resolution clause. For future legal battles to be less costly and time-consuming, it is important to understand the dispute resolution clause.

Scaling Within a Multi-Million Dollar Company

The scale of a multi-million dollar company must be both sustainable and profitable. To achieve these goals, the company must have a clear understanding of its growth objectives.

Taking the company’s infrastructure into account is one of the most important aspects of scaling a business. In order for the company to grow, systems and processes will need to be in place. To achieve this, it is necessary to have the right team in place, as well as the right tools and resources.

It is also important to consider the marketing and sales strategy of a business when scaling it. Growing a business means reaching a wider audience and generating more leads. By investing in marketing and sales initiatives tailored to the business’s target market, the company will be more likely to reach its goals.

Last but not least, when scaling a business, it is essential to understand the company’s financial resources. Research and development, marketing, and sales initiatives require the company to have the necessary capital.

Here are some additional tips for scaling a multi-million-dollar company:

Focus on your core competencies.

Identify your company’s strengths and focus on them. As your business grows, you will be able to maintain your competitive advantage.

Delegate tasks effectively.

The more you grow, the harder it becomes for you to do everything yourself. In order to focus on the most important aspects of your business, you must delegate tasks to your team members.

“I have a quarterback for every company, for every investment, and for every event,” Dan says. “And so, if you see me throwing a charity event or a business event or a mastermind or a free event or anything between, there’s someone specifically running that thing.” He always has a quarterback running any deal or company that he invests in. “I don’t do anything unless I have a quarterback for it, because otherwise, I just physically can’t.”

Consider a “rolling fund” to raise capital.

Accredited investors can now commit with much less risk with this fascinating disruption to the traditional fund model.

Why? In addition to the significant financial commitment, it can take one or two years to put together a legal document and to do a roadshow where you pitch investors.

Entrepreneurs with a good understanding of raising capital will benefit from this offer. Let’s say you are looking to raise at least $1 million. There is no need for you to. As an alternative, you can “raise 25k, 50k, 100k, 300k, 200k at a time, at any time throughout the year”, Dan clarifies.

Invest in high-potential companies and de-risk your deals.

By investing only in companies with sales of $2 to $20 million, Dan is able to de-risk his investments. As a result, the 2 million mark is low because that one business has figured it out. Through the process, they got through the system. People care enough about them to spend a couple of million dollars with them, he adds. As a result, it reduced our risk a lot compared to a pure startup.

Raise capital using the “7, 8, 9 deal structure.”

As a result of this model, Dan was able to attract investors (including myself) and raise $8M for Black Site Ranch, which has tons of utility and perks.

What exactly is this deal structure? Well, it gives investors three different options.

Suppose an investor wanted to invest for one year and make 7% for that year, or they wanted to do it for two years and make 8% each year, or I wanted to lock in for three years and make 9% each year. The investor will get a balloon payment at the end of that term, regardless of whether it is one year, two years, or three years.