No. N.O. If you run a business you have to say this word all day long, every day. “No.” You might be reading this on a subway. Say, you’re taking the F train from Park Slope in Brooklyn to “hedge fund alley” on Park and 48th and you’re reading this article. Don’t be embarrassed. Say “No” out loud. Don’t pay attention to the people sitting around you staring. You need to practice.
Here’s an example. A few years ago, I’m sitting with a potential investor for the fund I was running at the time. I like this potential investor. He’s smart and knows other potential investors and most importantly, he enjoys my writing. We were closing a round on a fund on February 1. He asks if he can come in on March 1 instead due to “liquidity issues”. (No). Well what about if he puts in money right now but with a reduced fee structure (No). Well, what about giving better redemption privileges instead of an annual lockup (No.) Then he wants to tell me about these VC deals where his money is tied up (No. And note that this is a very difficult “no”. At the risk of making this parenthetical too long, it’s worth pointing out that everyone in this business likes to tell their “stories” and you MUST say no before they begin. The company that’s about to sign a deal with WalMart China to sell their patented iVacuums. The other company that has Donald Trump Swimwear that’s going to be the exclusive swimwear in every golf club in the country. Or the dental implants company that will revolutionize biting. The stories go on and on. The CEO put all of his mother’s money into the company. The new company that has the mineral rights to the largest coal excavation in Greater China. On and On. Just say no. But it’s hard because the stories begin quickly and you sort of have to hold your hands up and say, “oh yeah, I know that company. Please, I know it. Yeah, yeah, it’s that one. Yeah. Great. Yeah. No. No.”).
But that’s not all. You not only have to say No a lot, you have to hear No a lot. This is much harder. You travel to Palm Beach to meet a high net worth investor and you go through your whole presentation before putting out your hand for an investment (No.)
You ask your administrator to reduce fees until you hit $100mm in assets. (No.) For fund of funds managers: asking one of your funds for a mid-month estimate (No. – equivalent response: “50-100 basis points, give or take.”) Also for fund of fund managers: can I have transparency into the portfolio (No.)
A friend of mine gave me advice: Its not you. Don’t take it personally when they say no.
Its their problem. Ask again tomorrow.
Which brings me to “maybe”. If the market is down will you still have an up year?
(maybe). If the yield curve inverts will municipal bond funds be negative on the year? (maybe). Will you spend 150% of your time obsessing over your portfolio (maybe. But make the point that the portfolio is better off without you). Is alpha calculated by subtracting your beta times the S&P return from your return (maybe). Can you just take this one meeting with the company (maybe). Can you just take this one meeting with the fund manager who buys, and then flips, life insurance policies from elderly in critical care units (May-, actually, No). Do you want to go to my charity event’s dinner? (Maybe. But no.).
When I was a kid I used to sneak into my parent’s bookshelf and read the book, “Don’t say Yes when you want to say No” (there was a lot of sex stuff for a 10 year old). Unfortunately I’ve forgotten all of the insightful material. I say Yes. Can I lower fees? (No problem). Can I take a meeting with the younger cousin who wants to start a new fund? (Absolutely). Do you want to invest in my company (Sure. How much?) I know you haven’t done this in 10 years but can you help me design my website? (Sure, let me take a look). How about we have lunch? (Just tell me when and where). Can you finish writing the book by August? (Is 300 pages ok?)
It’s tough to make money. The only way to avoid wasting time is to say no as much as possible. Give a dollar to charity every time you say no. Flush ten dollars down the toilet everytime you say yes.Share This Post