Everything You Need to Know About
Building Your Dream Team
QLA vs SQF Methods Comparison
If you want to be successful as a deal maker… you’ll need to build a Dream Team!
But not just any team…
Specifically, we looked at SQF and QLA Dream Team strategies for finding a Chairman, CFO, accountants and lawyers who will do the heavy lifting for you.
They’ll all be working for you without using a penny of your own money.
You need to put together a “Dream Team”. The question is… how do you go about creating one?
We uncovered some very interesting findings….
And now it’s time to share what we discovered about the SQF and QLA Dream Team strategies.
In this article, we are going to look at how to build your Dream Team, and especially what pitfalls you should avoid when creating one and how. We will outline the importance of surrounding yourself with the right people and will look at two very different models to help you achieve this.
If you’re ready, make yourself comfortable and let’s begin...
So, you’ve sourced potential M&A opportunities and have spoken to several interested business owners over the phone. As a result of these phone conversations, you’ve had several meetings and have agreed to a deal in principle on what looks like a promising and profitable business.
After all your initial hard work, it’s now time to organize the due diligence so you can investigate and evaluate the records, assets, contracts, and operations of the business – and get your deal over the line.
But where do you start?
First and foremost, if you’re going to be a deal maker – you need to stop focusing on minutiae; that is, all the small and trivial details.
Minutiae is not an effective use of your time and is not going to make you money.
As a deal maker, there are three main areas you must focus on:
You probably already know that time is the most precious commodity there is.
You also need to realize:
If you’re going to be a deal maker – you CANNOT work alone.
You already know that you do not have the time to do absolutely EVERYTHING in your business. Whilst many solopreneurs love getting involved in many aspects of their business; as a dealpreneur who wants to scale, you need to think differently – you’ll need to build the ultimate “Dream Team”.
But what makes a great Dream Team? And how do you build one?
One way of looking at it is that you are driving a bus and you want to pick up as many skilled people as you can to help you on your journey. You are creating a toolkit.
There are different models for how to build a team that will surround you with the required expertise, but in this article, we’re going to compare two specific methods:
Before we proceed, let me make something clear. It’s absolutely essential to realize one very important factor when creating your Dream Team: structure follows strategy.
This is a concept that was brought to prominence by Alfred Chandler of the Harvard Business School.
Chandler published a book in 1977 entitled The Visible Hand: The Managerial Revolution in American Business, which highlighted the strategic decision-making processes of some of the USA’s largest corporations (such as DuPont, General Motors and Standard Oil). In short, they all adopted a common mantra: structure follows strategy.
Therefore, so should you.
If you’ve defined your goals, and are clear on your strategy about how to achieve these goals, you may now want to think about how you can leverage other people’s time in such a way that you deliver on your strategy.
Quantum Leap Advantage (QLA) model
Quantum Leap Advantage is Dan Peña’s high-ticket seminar for achieving success in life and business.
In this model, the Dream Team basically offers you credibility… and that’s it. It will help you have an instant track record that can be leveraged – particularly when contacting law firms, accountancy practices, and financiers; however, you’ll have to be able to convince these people to work with you. Peña only suggests high calibre firms and top-notch individuals to work with… but that’s easier said than done.
Anyway, Peña’s model structures a Dream Team as follows:
Typically someone over 55 years of age who’s “been there, done that” and has extensive M&A experience. In other words, an executive heavyweight. They may or may not have experience in your industry, but should be contactable on a weekly basis and guide you through the process. They should also help you to shape your overall strategy and refine and tweak it accordingly.
Your CFO should be a financial wizard and once again possess vast M&A experience. Pena also recommends you set your sights high – and target individuals of the highest calibre, such as retired PwC and Deloitte partners.
Having an accountant on board instantly gives you someone that speaks the language of the accountancy firms you’ll be approaching to help complete deals. Once again, the emphasis is on targeting industry big-hitters – such as former managing partners of the big accounting firms.
Given that an integral part of getting deals done involves drawing up contracts and due diligence, having a lawyer in your QLA Dream Team is a must. They will be analyzing areas such as movable and immovable assets, management contracts, intellectual property, potential employment issues, and any pending litigations, and once again should have considerable expertise in conducting mergers and acquisitions.
1-2 Industry Experts
These should be high profile individuals with years of experience who have ideally worked with some of the industry’s most renowned companies. If they have been heavily involved in doing deals or negotiations – that’s even better. Finally, they should be energetic and possess a can-do attitude.
Given the ambitious appointments to your Board of Directors using the QLA model, it’s no surprise that Peña recommends that you go after prestigious law firms, as opposed to your local high street lawyer. You may want to go all out and approach one of the Big Four or Magic Circle firms or at the very least contact those in the top ten.
Accounting FirmAs with your law firm, so with your accounting firm. You may have a friend who works at an accountant, but do not be tempted to set your sights low. According to QLA, you need to shoot for the stars and again approach those at the top of their profession – they will exponentially enhance your credibility when it comes to dealing with financiers.
As said, a constant theme for each member of the QLA Dream Team is high-calibre, top-notch and vastly experienced.
OK, but where can you find these individuals?
There are several different methods of locating the right type of talent for your Dream Team. QLA mentees have used:
Really?? Good luck with that
Let’s assume you reached out to them, presented your idea and proposition, and that they agreed to join you… Well, how do you afford such prodigious resources now??
Here are some ideas (which may or may not work):
Each member is offered a free founder’s equity in exchange for their time and knowledge and isn’t asked or expected to provide capital of their own. They are motivated to add value to the Dream Team and get a piece of the action – typically between 2-5% in equity.
Law and Accounting firms
According to Peña, these firms will work on a “success fee basis” – meaning they will delay fees and roll them into the financing of the transaction. By doing so, you do not need to pay them before you have finance in place – therefore, you do not need any capital.
If you have doubts about implementing this model, then keep reading – we are going to look at something very different…
The Stamford Quantum Formula (SQF) model
The SQF model for creating and building a Dream Team is very different from Peña’s model.
In QLA, one of the primary advantages of having a Dream Team is credibility. But because the SQF model shortcuts the entire deal-making process from sourcing, contacting and negotiating with businesses to financing and organizing due diligence, you don’t need the additional credibility. You will already have sufficient credibility from your ability to identify and execute deals quickly and effectively.
Another difference is that using the QLA model requires that you build your team BEFORE you approach any potential acquisition targets.
With SQF, you don’t have to do this. You want to ensure they are in place once you have agreed to a deal with a business owner (even though you may not need all the team for every deal), but not having a team shouldn’t stop you from going out there and finding deals in the first place!!!
The structure of the SQF Dream Team is also different and more strategic.
Your lawyer, must, of course, be well versed in M&A and fully understand exactly how you want the transaction to proceed. To save time, you can also source another lawyer and recommend them to act on behalf of the seller of the business.
Due diligence is a critical aspect of the acquisition process, so you’ll want to hire a firm that has a team of experienced consultants, investigators, and business analysts. Without question, the quality and thoroughness of the due diligence process is paramount, as you don’t want to miss anything prohibitive that may be lurking in the background and only surface once the deal has been completed.
Finance Director (CFO)
An experienced number cruncher who can go through the figures with a fine-tooth comb and who can work with the company once you have successfully acquired it, helping you identify areas for financial growth or efficiencies.
It’s always useful to have a financial broker you can call on when you need to raise finance – particularly as some financiers may have special products and/or agreements that are only available through a broker. Brokers will also be able to recommend the right products for your circumstances.
Given that most companies either have too much or insufficient insurance, it’s always a good idea to seek the counsel of an insurance auditor, especially when undertaking a leveraged buyout (LBO).
When a business carries physical stock, a surveyor is a useful addition to your team. They can deliver an accurate value of the stock so you can understand how this may impact the business.
Although you may never need to use them, it's better to be prepared in case the worst happens. Choose your insolvency practitioner carefully – you should trust them implicitly, and they need to be available when you need them.
It’s always useful having a company accountant as part of your Dream Team to examine and prepare financial records for your acquisition targets. They are also a useful source of deal flow.
As a dealpreneur, access to funding allows you to move quickly to secure a deal. Having relationships with investors will give you an advantage over your competitors and may also enhance your deal flow.
Having an expert who can advise on a wide range of corporate tax services and potential HM Revenue & Customs negotiations is another important tool in your Dream Team toolkit.
In addition to these invaluable specialists, there are other members of your Dream Team that you may choose to deploy for certain acquisitions, and an array of different circumstances to enhance operational, sales and marketing performance. These include:
So, there you have it – a Dream Team, but with two very different approaches.
We’ve compared the QLA method – which focuses primarily on credibility – and the SQF model, whereby each member is brought in for a specific purpose and based on their specific expertise.
With the QLA approach, your reputation can be enhanced by association with a team of high calibre individuals… providing you can approach them and convince them to work with you (good luck with that).
So what is it going to be?
The choice is yours...
And now I’d like to hear from you:
What’s your #1 takeaway lesson from this SQF and QLA Dream Team strategies study?
Or maybe you have a question.
Either way, leave a comment below right now.