No Mulligans - Similarities between the Drive & the Deal

Recently, while on vacation trying to tune out the business and all the accompanying voices in my head, I had a mini epiphany. It dawned on me that the golf game I was supposed to be enjoying mirrors the complexities of the deals we do in business. As I played that round of golf, poorly I might add, the similarities just kept coming up over and over. I thought two things to myself. First, I should start concentrating on golf so my round doesn't go into triple digits and, second, that this would be a fantastic subject for an article.

Many times I see parallels between the market and the deal-making environment to that of the game of golf. No wonder so many business deals are done over a round. Golf is really a game of confidence and concentration. There is good concentration, such as the setup of the shot, and bad concentration, such as focusing on when the beer cart is going to come by next. The same concentration and confidence factors also hold true with deal-making in business. If you are concentrating on the wrong aspect of the deal or are trying to think too many steps ahead, then you will lose the here and now, which is critical.

When concentration starts to wane it has a very ugly companion and that is loss of confidence. For example, if you are standing over your ball thinking, "What do I do now," then there is a loss of focus and with it the loss of raw confidence in your abilities. This is true in both business and golf.

As I continued to ponder parallels, the following similarities came to me. Perhaps they will help you next time you are ramping up for a deal or a drive:

The Set Up: Before you set up for the swing, there are many thoughts that go through your head. A deal, complex or not, has the same evaluation that needs to be thought through before the next steps can be taken. Each decision made affects the rest of the deal or, in this case, your golf game.

The Mulligan: It is always nice to think we get a "breakfast ball" on the first tee so that if the shot is errant we can pretend it never happened and get a do-over. Well, there are no mulligans in the world of deal-making - you get one shot to make it your best and advance the deal toward a successful conclusion. Golf is a game of integrity; it can be fun and a wonderful outlet for the guys. But at the end of the day the goal is the same: play within the rules, take your best shot and advance it down the fairway.

Approaching the Ball = Approaching the Deal: When I approach my ball I have to assess the lie, the yardage, the wind, pin placement, etc. The most important part of all of this assessment is playing the ball as it lies. There is no improving its position through the obligatory "foot wedge." This would unfairly affect the outcome of the shot and the game. A deal has many of the same characteristics. You must evaluate the deal at hand on the merits of its value, who the investors would be, the management capabilities, market conditions, pier-group analysis, etc. You have to look at the deal as is to assess what needs to be done to bring it to a final success.

External Influences: These influences can be wind, weather, green speed, beer and, yes, one's own thoughts. Can we control these elements? Most of the time you can control the "beer effect" and sometimes your thoughts, but the game proceeds regardless of these external issues. Deals can be very similar because there are always external pressures that cannot be anticipated or controlled. Approach the deal like you would a round on a challenging course. Know that things will be out of your control and only try to affect the things you can control; in other words, don't get in your own way.

Have a Routine: Each round of golf, even on the same course, will present a different outcome. I can shoot an 80 one day and return the next when the slightest nuances result in a 94. Each shot presents its own set of circumstances that need to be evaluated and the outcome of each shot will be reflected in the ending score of the round. In a deal, each hurdle that appears needs to be evaluated and considered prior to effectively maneuvering a way around to its closing. In each case, if a routine or a game plan is in place it will help minimize the amount of things that can go wrong, be it in a deal or on the course.

The point I'm trying to make with these analogies is that golf and the business deal have many complexities and sometimes, when you least expect it (such as while on vacation), something happens that triggers a thought or solution. Sometimes when you are most relaxed and as far as possible from a deal or transaction the best ideas seem to float to the surface. Now, if only we could all just relax enough to have that Zen moment on the golf course, life would be complete.

Andre Peschong is an investment banking professional with an extensive background in the creation and evaluation of specialized derivative financial instruments. With years of deal structuring, from due diligence to gauging key risks associated with institutional equity positions within potential investment candidates to various exit strategies, Peschong has extensive skills in capital structuring, investment banking and institutional placements. As a frequent speaker and panelist, he is able to easily convey the current state and trends of the equity market. For more information or to read more about his commentary on the private equity market, visit