Deal Breakers . . . 

are substantive or non-substantive points of disagreement that prevent a deal from closing. Deal breakers can also refer to individuals who are so interested in something other than closing a deal that they hinder or stop a financing without good reason. No one wants a deal breaker near an important negotiation.

Individual deal breakers can be hard to distinguish from friends and counselors who try to help management get a good deal. They come in assorted varieties:

• The hard-liner believes that the best way to negotiate is to take firm positions and not discuss the issues. He presents a proposal on a take-it-or-leave-it basis and acts annoyed when a legitimate issue is raised by the other side. The hard-liner's intransigence results in a dead deal even when the parties' respective interests could have resulted in a good deal for both sides. The best deals are usually made between parties who discuss their concerns intelligently and search creatively for common ground on which a deal can be based.

• The minutiae master wears everyone out with his obsessive concern for detail. He wants to document every detail regardless of its practical importance to the deal. This sometimes disguises the fact that he does not understand its economics. He is often heard repeating phrases such as "we did it this way on the last deal" or "this is our standard language, we always insist on it."

• The best dealer is obsessed with getting the best deal. Instead of working to get the best deal available, he insists on a deal that is so good for him and so bad for the other party that it cannot be made. This person often appears as an adviser to a businessman who is unsure of himself and does not completely understand the economics of the proposed transaction.

• The last dealer wants the current deal to be exactly like the last one he worked on. It doesn't matter to him that this deal is different: He understood the last deal and will do everything he can to force this one into a format with which he is familiar. Since his last deal is different from the present deal, the other side will object. If he goes unchecked, the deal will die.

Individual deal breakers can be hard to distinguish from advisors who have the parties' best interests at heart. This is because their deal breaking is related to some hidden agenda, such as fulfilling their personal idea of what a tough negotiator is or hiding their inexperience with the funding process. By contrast, good negotiators are not constrained by personal agendas that are unrelated to the goals of the negotiation. They are able to keep the goals of their party clearly in focus throughout the negotiations and work diligently, using all their creativity and experience, to obtain the best deal. For the entrepreneur, distinguishing between an advisor who is a deal breaker and one who is a good negotiator can mean the difference between success and failure. See: Deal, Deal Flow, Negotiation, Shopping, We Always Do It This Way.