One morning in February, when I took over as lead investment banker of the Industra Genomics deal, I quickly realized that the company was losing control of its main investor. Within hours, I was on a jet to Moscow to meet them. What seemed like a routine trip to get a deal back-on-track quickly turned into the toughest deal of the year.
The truly rich in Russia are called Oligarchs. This is a term that means control and power.
When I met my first Oligarch, I had assumed my “winner-take-all” attitude and my pitch methods would quickly close the deal. But within hours of landing at Sheremetyevo airport, I was getting an attitude adjustment.
Ivan Ivanovich lives in a Moscow high-rise overlooking the river. He is tall and burly; all the executives in his company fear him. He looms large in life. He has a big mustache—which the president of Russia once asked him to shave. He said ‘nyet’ to that request, just as he said no to the suggestion, by the US Secretary of State, that he stop selling arms to Iran, and no to virtually every demand put in front of him.
Yet, knowing all this, I found myself sitting in front of him, making demands.
I said, ‘close the deal as agreed within 24 hours or lose your deposit.’ Ivan, the veteran of a hundred union negotiations—was not pleased. I was rushed by private security into a small conference room for 1:1 negotiation with Ivan.
What’s unusual about this meeting was that as negotiations started, his English became perfect, but only while he was pointing out the weak points in my deal. When I tried to explain the strong points of my deal, then, suddenly … English. not. speaking. so. good.
Did I overcome these major setbacks and close the deal? I’ll tell you about that in a moment.
First, let me address this: The reason I’ve been asked to write this article is to highlight the methods I have used to raise over $1 billion to date. Including $50 million last week. Thousands of people have read my book and asked for the kind of real world example we’re discussing now.
So back to Mother Russia, here’s where I left off…
I work with a lot of money. My decisions make the difference of who gets millions of dollars and who doesn’t. My skills in this area are very very good. In 40 large deals, I have succeeded in funding 39. But Ivan decided to resist me.
His reputation as a tough negotiator was on the line. The first thing he said to me was, “No money for you.”
Did I panic? Sure, you can call it that. Something in the Pitch Anything method was broken. I didn’t know what the problem was or how to fix it. Because I don’t speak Russian, I quickly found myself explaining complex technology to Ivan as though I were speaking to a five-year-old.
When you find yourself talking to a billionaire like he’s a child, you know something is going wrong.
If you’re familiar with Chapter 2 in my book, which talks about Frame Control, then you’ll know exactly where I was headed: My frame was about to be smashed into pieces. As I explained to Ivan the most exciting feature of the company’s product, he ignored me. He would turn to his team and speak Russian for what seemed like five minutes only heightening my sense of panic.
Coming back to the conversation only to bring up “negative” aspects of my deal, Ivan would suddenly speak pretty damn good English and want to discuss the negatives in great detail. When I talked about the positives in the deal, I made clear and brief statements, speaking for only 20 seconds at a time. Ivan stared at me blankly, needing his translator to explain … every …. last … word. Every question shot at me was phrased in a way that caused me to negotiate against myself and get further lost in my own explanations.
And just when I thought I had made a breakthrough, Ivan would look confused and ask such a basic question about the deal, it made me wonder if he had any idea what the company even did.
Then, when I would start to answer, he would cut me off, “Yes, yes, we know all this” and look at me as if I were an idiot. The entire process was the most disorienting, frame-busting situation I’d ever been in. (And yet I couldn’t help but be impressed at the same time)
Ivan was taking away all of my usual control points. Although I knew exactly where I was in the pitch process, I couldn’t get frame control.
It then struck me. I’m acting needy.
It was this point that the whole “confused Russian billionaire” act stopped working on me at once. I realized that a man like this didn’t make a billion dollars by getting so easily confused by basic deal terms.
He was toying with me. I realized, Ivan was a master of Frame Control. Inside, he was laughing at me. Playing the game.
Truth is, you don’t get to his level without knowing how to control meetings like this.
But look, you don’t get to my level, either, without being able to land on your feet and mount a comeback. Twenty minutes later, I walked away with $5 million.
I did three things that turned the meeting around and got the deal done. First, I stopped feeding into Ivan’s process. When he acted confused, I said, “Ivan, I do not allow you to be confused about this. It’s too basic of a deal point. We have to move on, and you have to accept this.” And then I continued to the next point.
Next, no more negotiating through a translator. Look, people speak perfect English all over the world. This billionaire had to be able understand me perfectly.
Finally, no more seeking approval. When I said something, I no longer checked in to see if he understood it. Truth is, I don’t need anyone’s approval. This is a great deal – at a great price. Ivan will make 5X his money in two years if he invests …. Probably more. If he can’t follow along, or engage in proper business-like behavior, then He’s OUT, and I’m moving on to the next guy. Even if I don’t have a “next-guy”, I’ll just have to work harder and find one.
If Ivan doesn’t think I’ll kick him out of the deal, and walk away, then I will be acting needy. Needy behavior kills every deal, no matter where in the world it is, or what the dollar amount. Understand this… When we communicate, we tend to be very “response dependent.” (I cover this extensively in chapter 5 in the book)
This means we’re looking for approval of what we have just said, before we move on to the next point we need to make. This is a sign of weakness. Don’t do it. (That’s what I had to remind myself.)
The language barrier with Ivan disrupted my ability to know if my message was getting through. I acted needy. Like I needed his approval.
When he failed to acknowledge me, my confidence suffered because I didn’t know if I delivered my message effectively.
If you deliver a simple message, in plain English, directly to another person one-on-one, in a quiet room … they get it. Either through body language or spoken, they get it. They might not LIKE it, but they get the message. Do not wait for approval. Waiting for approval means you are falling into the Needy Frame. And if you fall into this frame, your deal will die.
With Ivan, I relied on my ability to hold strong frames, and get out of neediness. It took me three quarters of the meeting to get it back under control, but I did it. Not because I’m a savant, but because I committed to learning and studying Frame Control, Prizing and Status.
You will find yourself in a similar situation one day, probably sooner than you think. You’ll have to show non-neediness instead of falling into the other person’s frame. If they succeed and draw you into their frame, they’ll make you nervous and give themselves the advantage in the negotiations.
In the end, the person with the best Frame Control wins.
This time, it was me that won. Next time, if I do my job well, it will be you. I came away with $5 million; perhaps it could have been $10 million. But for the first 45 minutes of the meeting, I thought I was going to go home with nothing more than one of those black fuzzy hats.
OREN KLAFF, Director of Capital Markets at Intersection Capital. He is the Author of Pitch Anything and main instructor of the Executive Training Program, Pitch Mastery.