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How to Build the "Perfect Cake" in your Acquisition Strategy
Matt Bodnar
August 15, 2024
The "Perfect Cake" Acquisition Strategy
Recently, a buddy pitched me an acquisition opportunity that I originally said “no thanks” to.
But then he asked a thought-provoking question: "Before you say no, why not take some time to 'bake your perfect cake' and tell me what a 'yes' would look like instead?"
This simple phrase stuck with me as a great framework for evaluating deals.
It challenges you to get creative about what your ideal terms and conditions would be, instead of simply rejecting something outright.
So over that weekend, I put together my “perfect cake” for how I would want the deal structured and got back to him. Although I ended up passing in the end, it changed my perspective.
I realized this is a technique that applies broadly when negotiating or exploring new partnerships.
Since then, I’ve used “baking my perfect cake” as a lens for advising clients on M&A as well.
Recently when a client said an acquisition target wasn’t the right fit, I reframed it as: “Before we say no, let’s think through our perfect cake for this deal.”
The outcome?
We uncovered creative ways to structure the transaction that we wouldn’t have considered initially.
And suddenly, we saw a path to win-win. Of course, your counterparty may still say your “perfect cake” asks are too ambitious.
But as legendary investors like Warren Buffett have proven, saying yes to audacious deals is how you make a fortune.
Some of the best investors of all time have portfolios largely comprised of cases where they held their ground on their perfect cake scenarios when everyone else thought they were crazy.
And some partners said yes despite the odds—and the rest was history.
So the next time you get a partnership offer or acquisition opportunity, I encourage you to indulge in a thought experiment before walking away.
Bake your perfect cake.
Get imaginative on deal terms rather than instantly dismissing something not fitting narrow criteria.
You just might end up with the recipe for your next breakthrough.
Best,
Matt
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