First, some recent examples:
- A friend in wealth management referred a potential client. He called me to pass along the information. His firm one of the biggest in the world has fee relationships with other advisors. Their policy is that leads should be referred to these vendors in order to drive referral fees. He came to us, in violation of his internal restrictions, because under these specific circumstances we presented a better option for his client.
- A college friend sent me a subscription agreement for a convertible debt offering by a startup. He called to rave about the company, saying the he himself is an investor. The company, he said, is going to do great things. When I dug deeper, I learned that his investment was tiny, and that he had a fee agreement on additional inbound capital.
- An associate from a mid-market M&A firm called one of my clients to say she had a buyer, but she would only make the introduction for a fee. He declined. She called me. I told her that we already knew the buyers and gave her a short list of who we were already talking to. She ignored me and kept calling the CEO until he finally relented. When she made the introduction it turned out that a) the introduction was to a buyside advisor, not a buyer, and b) the buyer was already on our list.
- An East Coast capital group recently issued an LOI on one of our clients, and then posted a public notice on their website naming the client and outlining a capital raise in the same amount as the offer, violating the NDA, and probably the NASD rules as well.
You get the point. There is a maze of incentives out there and most of the people with their hand out are destroying, not creating value.
This is why Corum has remained focused on the one thing we do best for over 25 years sellside mandates with transparent terms, where we become an advocate for our clients and an advocate for the deal. We have lots of friends who are lawyers and bankers and accountants, but we dont rely on them for business and we dont pay them off when deals close.