Deal frameworks, leadership lessons and things learned the hard way.

Leadership + Deal Structures + Navy SEAL Lessons

My fiancee is going to hate this post.

I’ve realized something about the painted warriors (that’s what ISIS and the Taliban call the Navy SEALs and their tattooed appendages), they don’t like to draw attention to themselves.

“The loudest is a target.” – CJP

Many (not all) of those fancy famous SEALs touting the Trident everywhere are quietly looked down upon in the Teams. Those who talk about individual wins, who stand in the daylight when they are supposed to operate at night. After all, the SEALs call themselves, “the Teams.” Ingrained in their DNA is this bond of brotherhood. Few I’s, many we’s.

Earmuffs Mom: Chris likes to joke that he’s slept next to more men than women, since often they’re bunking down, side by side, in the dust of a far-off land.

And yet, I begged him to let me write a bit about him and his humans. Why? I’ve worked with some of the largest companies, some of the smallest, sweaty ones, ones in finance, ones in tech, and there has been a consistent thread… a giant black hole of leadership. The opposite of a band of brothers or sisters. Amidst a sea of books on “How Great a CEO Am I!,” was an actual dearth of great CEOs.

Myself included.

I think it’s about time we dug into what it means to actually be a leader. After all, we focus on wealth because:

Financial freedom -> Personal freedom -> Idealogical freedom

But what good are you and your wealth without guiding principles to live by? In a world today where we are all starved for leadership, maybe you will find something thirst-quenching in the lessons I’ve learned from the painted warriors.

A disclaimer; any inaccuracies, things you don’t like, or grandstanding on behalf of these gents is ALL me.

But first… Rules for Money before Rules for Life…

Rules in Deal Structuring:

Let’s Talk Deal Frameworks

Everything in life has rules. How you negotiate pay, buying a company, getting equity, or just a new job. If you don’t spend time understanding the frame of deals, you’ll get taken to the bank just about every time. I like taking people to the bank, not getting taken by them. Wink.

Chris and I like to negotiate at markets in third-world countries whenever traveling. He’s bought rugs in Iraq and Afghanistan, helped broker deals in cities where trust long ago left the land, and he’s seen at a very high level what happens when you don’t ferret out all the parts of a deal. Chaos.

So while there are many more, here are four things to remember in M&A, passive income, or structuring a deal to sell that used junk in your garage on Craigslist.

#1 Every Deal Is About 1 of 2 Things.

Money or power.

Every deal.

People will disagree with me here. They’re wrong. So figure out what is important to the other side and you’re already ahead.

#2 Every deal has two aspects: Price & Terms.

The saying for dealmakers:

“You can have your price and my terms, or my price and your terms… but you can’t have both. “

Secret: Control the terms, you control the price.

#3 If You Don’t Know the Terms You Won’t Control the Deal

Have you ever tried to negotiate with someone when you don’t speak their language fluently? Brutal. THAT is what you are doing if you don’t speak deal terms. Get familiar w/ finance speak and watch how much more money you make.

Terms to know (this is just the tip of the ole iceberg):

Equity kicker, full ratchet, warrants, put option, ROFR, sidecars, first lien position, personal guarantee, stock pledges, yield maintenance, etc.

Pick up my friend Justin Donald’s book Lifestyle Investor. You can skip the first couple chapters of his story and go straight to the sections on structuring deals, or the appendix full of deal terms. The book is awesome and faster to read than a stop sign.

#4 Cash Isn’t King, Cashflow Is…

I optimize for making $ on my deals day 1.

When I close a deal personally (not through our VC funds) I want that deal to pay me the same day. Greedy, maybe? Possible, unequivocally.

Most people sign a term sheet straight from Y-Combinator. You have to do that when the deals are super hot (theoretically), but if I’m optimizing for cashflow not potential 100x’s, I’m not signing that bad boy.

Instead, I’m asking for things like accelerated repayments (aka I give you x dollars, you pay me first before you take profit).

On every deal ask yourself; can I get money now AND an opportunity for upside later?

Rules In Life

We were separated by about 7,494 miles. Chris was living in a remote compound with a room that looked a bit like the inside of an unfinished woodshed. I was staying at the Ritz. Same, same basically.

To ground ourselves while far apart we’d write; prompts shared when a glass of wine couldn’t be. That night I asked him to take out a pen and transcribe the words he wanted to live by. His Rules for Life. It’s something I believe every human should have, what lines will you never cross? What drives you? What is your own personal set of commandments?

So when the hard dark times come to torment, you have a North Star.

I’ve accumulated some of my favorite lessons learned from my man, may they serve you as they have me.

#1 Only prove your love, not your worth

• The loudest is a target
• You accept your actions, not the others
• Under-promise, over-deliver
• Humility in everything
• Don’t make excuses for your standards 
• Always stay ahead

#2 Strength through conflict and competition

• iron sharpens iron
• resiliency is a purpose
• complacency kills

We have a ridiculous saying, “Are you a Good White Shark? Or are you a Great White Shark?”

To which I reply bemused, “Shut up I’m a tired F*ing Shark.”

But he lives by this motto, it’s why we do Muay Thai, Boxing, Jiu Jitsu, Shooting… or if you’d like to call PETA … even why he wrestled a steer once.

As Mike Tyson said, “Everyone has a plan until you get punched in the face.”

#3 Civilize the mind, make savage the body

• the vessel for life’s experiences, treat it accordingly
• strength, adaptability, flexibility, endurance, power, agility
• nothing will try you like unexpected movement
• there is use in the cathartic
• be a practitioner instead of a follower

#4 Work is what you do for others, pursuits are for yourself

• you might not always be pursuing a passion, so bring yours
• replicate the way of others if it is proven in time spent and quality created
• do not give another a chance to do a better job than you know-how

#5 Don’t fall victim to another’s agenda

• there is no democracy, there is oligarchy and dictatorship
• everything is rooted in self-interest 
• groupthink is not an excuse

I have long been prey to two terrible traits: people-pleasing and avoidance of conflict. It makes me physically ill to think of letting people down, of people not liking me, or when I have to have a big girl conversation. Can you relate? Well, Chris can’t. I’ll tell you a true story. I had to go break off a big partnership. I was devastated, mad, and scared. The other partner had lied to me, about me, and had disparaged my name. He wasn’t counting on that the person he told would be more loyal to me than him. I was shaking I was so nervous, this man was prone to outbursts.

My idea, I brought Chris along with me. I asked him to just sit by my side. Not say anything, but if he wouldn’t let me speak, lean forward. Chris obliged. The power of someone who can not be swayed by intimidation is incredible. Needless to say when we showed up this gent was a bit ahem, perturbed. He scurried off to the bathroom faster than a 6-year-old waiting to pee, to compose himself.

Ever since then, I’ve learned from Chris – if you fall victim to another’s agenda once, you’ll continue to. Hold steady and don’t be afraid to have someone hold you up.

#6 I can think, I can wait, I can fast

• you are the master of your fate and the captain of your soul
• do as is reasonable for your survival and happiness
• sacrifice for yourself when suited, sacrifice of yourself when you must
• patience is not only a virtue, it is the key to enlightenment
• don’t connect dots without context

#7 Don’t just have a purpose, be a purpose

• protect those who can’t, cast aside those that won’t, enable those that want 
• everyone is where they are because of choice, free will is not free, the tax is discipline
• Silence is acceptance
• There is only passive and active
• Happiness is a purpose as is experience 

Chris had a “terp” (interpreter) in a particularly rough part of the world named Mike. Mike lived in a small remote village in a land time continued to punish. And yet, he spoke English fluently, with an accent I can only describe as from a Godfather movie in its New Jersey-ness. He’d learned our tongue from TV after all. This man had seen more combat than just about any American, he’d grown in it. After watching what ISIS was doing to his people, he risked his life to help us, the infidels at the age of 20.

Years later, this weekend, Mike will graduate from US Marine Corps basic training. His valor in combat in his homeland saved his team many a time and allowed him and his family to come to the US away from a place where he had been kidnapped, beaten, threatened and would have most likely been killed if he’d been left. What did he do with his new freedom?

He joined the Corps, he volunteered to give back to the country that gave to him.

Freedom from tyranny doesn’t include freedom from obligation.

#8 Space people

• pay homage to that which makes you grow
• learn from what will kill you
• faith is not a reasonable outcome, nor a suitable option for a solution
• there is a role for religion, but it is not a ruling body

#9 Passionate Compassion

• everyone has trouble and story, they are not yours but be aware
• Golden Rule
• influence and be influenced
• there’s a beautiful ending to a hardship endured

#10 Wander…everywhere and always

• be a steward, not a loose affiliate
• don’t develop habits on the road
• all plants grow roots if they’re there long enough
• don’t bring it all, but bring it all back

“Think of your effect on those around you like waves rippling across on calm waters. Your imprint propagates and increases in magnitude across time as the chain reaction of disturbances become relevant.

You don’t have to be a censored evangelist, but mindful of those causes you support, opinions you voice, and people you choose to show deference. Look at the influencers in realms of life for which they have no experience or don’t share the struggles and actions of their successes and failures…be wary of the fitness models who say they sacrifice and drive…for what…for abs? Fitness is important, but claiming you’re a super-human for a self-focused endeavor to drive likes isn’t a struggle worth supporting.

Keep sand at the beach and dirt in the fields and trash out of the oceans…” – CJP

Wolf Rules for Life…

Howl Often

Revel in the moonlight

Protect the pack

Love always

I hope you’ll take out your pen and write down the rules you’ll live your life by. After all, if you don’t, someone else will write them for you.

Question everything… including yourself,

Codie