Navigating International Deals
“International deals are hard and if you go in there thinking it’s going to be your way, you're destined to fail.” - Jeff Baker
When doing international deals, there are going to be a lot of differences in behavior, cultures, language, mindset, and even the way they do meetings. So you have to be very flexible and adapt to whoever you are talking to. If you enter into an international deal with a closed mindset, you are going to fail.
How to make international deals successful
The best thing that you can do is to ask questions. Learn from the management team and the people that you are talking to on the sell side. Understand that just because you do it one way doesn't necessarily mean it's going to be effective in the international market.
Also, approach the deal and make it a partnership. Most entrepreneurs that are selling their company have a vested interest in seeing their company succeed, so the last thing they want to do is destroy it.
Challenges in International deals
The biggest challenge in international deals is Language, especially if the country doesn’t speak english. You are going to have to hire an interpreter and hope she does a good job and no meanings get lost in translation.
Also, diligence is going to be very different. All the contracts are in local language, all the financials are going to be in local currency. So you also have to get third party help to translate all that.
Beware of Illegal Activities
One of the biggest threats in international deals is making sure that the company that you’re acquiring is not involved in any kickbacks or bribes and things of that nature. It’s illegal in the U.S. to buy a company that has violated the FCPA, and the buying company is going to take full accountability on that.
So that has to be part of your diligence and you have to determine that early to stop the deal if ever those activities are present.