Let me explain to the handful of readers who actually noticed my absence from these virtual pages that this is what it takes for a small business to close a $20 million three-year capital financing deal with a global bank (such as Citi): You basically have to put your entire fucking life on hold.
That is, of course, if you are someone like me - a CFO who rolls up her sleeves and plunges herself into the nitty-gritty of negotiating every single definition, every single term, every single condition, and every single covenant of the Term Sheet and then the Credit Agreement in a pursuit of getting the best deal possible; someone who has the grasp of a fox terrier, who can shove pushy bankers and lawyers right back where they belong, who is not afraid of the ambiguous formulations, obscure terminology, and legal jargon.
But that's it, isn't it? In order to be able to get exactly what you need out of any deal that involves money-holders and their supporting infrastructures you need to know your business better than anyone else and their business better than they do. You need to speak their language and your comprehension of it must be more nuanced than theirs. It's nothing short of a battle for the business survival, and if you don't prevail you and those who rely on you lose. It's like in Game of Thrones: Tyrion's Champion, Prince Oberyn, mortally forfeits the battle to The Mountain, and that spells really bad news for Tywin Lannister's youngest son.
The problem is that most corporate financial executives don't see it that way: just like many other salaried employees, they don't care to know anything beyond bare necessities and they don't feel fiscally responsible for their companies' wellbeing. Hence, the low levels of professional awareness and circumvention of sophisticated issues is observed in most CFOs and Controllers today. And it ends up costing employers a pretty penny in unnecessary legal, accounting, and consulting fees.
Hey, you don't have to take my word for it. By the way, all numbers below are real and quotes are taken verbatim from various communications.
Let's see. When the bankers presented us with the Term Sheet back in March, I did not get either our corporate attorneys nor independent CPAs involved at all. The bank's credit risk group and I spent two months going back and force, until I got the document into an acceptable shape (estimated savings on legal and financial consulting fees - $50K). As a part of the Term Sheet, I insisted on the bank's due diligence and legal expenses (changeable to us) being capped (estimated savings - $35K).
The Citibank people, stuffed to the gills with data and reports I've provided to them during this process, kept telling the other members of my Board of Directors things like, "Oh, that Marina, she is amazing! She is the best! She is so tough!" They would write emails like: "Thanks, Marina. This is very helpful, plus your expertise is tremendous!" As if I was performing some magic tricks - I was just doing my job... thoroughly. When the Term Sheet was signed and sent to the bank my future relationship manager asked me in confidence (referring to the owners), "Do they understand that the only reason they are getting this deal is you?" Hmm...
After successful due diligence and final approvals from the bank's Credit Committee, the Agreement package (186 pages of documents) was emailed to me by Citi's lawyers. The lead attorney asked me in the cover email to provide him with the contact info of my legal representation, so that lawyers could start dealing with each other directly. I was like, "Fuck, no!"
You see, as soon as you officially appoint a lawyer as your representative, the other side is not allowed to discuss anything directly with you. Here's what happens: Let's say the bankers propose an additional clause or some adjustment; they call their lawyer; their lawyer contacts my lawyer; my lawyer, who doesn't know much about the intricacies of my business and is not allowed to make any decisions on his own, delivers the request to me. And then in the opposite direction: I formulate my response; now I have to explain to my lawyer all details in a digestible format so that he can deliver them to his legal counterpart; the latter than communicates them to the bank.
Are you counting the connections? We are talking quadruple billable hours on both sides! And it's like that for every single issue and point. I'm not doing that! I say, "Excuse me, sir, but for now you will be talking directly to me - at least until all business and financial kinks of these documents are ironed out. Okay?"
Professionally lawyers are just as obnoxious as doctors - they think that their diplomas make them better than other people (yet, they discuss economic matters with me as if they too had a PhD in the subject and an MBA). So, at first the bank's attorney bristles, but, as I start beating him up on one point after another, he gets quite tamed and develops respect. He actually says, "I hold you in high esteem," which is very nice, because the majority of these assholes don't ever want to admit that you are their equal (estimated legal fees savings - $30K).
On the day the deal was closed one of the shareholders wrote to me: "...Your performance transcended what could reasonably have been expected from a typical CFO."
Well, that' nice, isn't it? Except that all these praise-singers probably think that I'm flattered by their compliments (as if I live for their approval). But I am embarrassed: I keep thinking how all those ignorant CFOs and Controllers taint the image of my profession. And everybody thinks that you are just like the rest of them until you prove otherwise.
People say to me, "What difference did it make for you personally? Did you get a deal-completion bonus?" And some ask, "Why try so hard? You don't even care about 'business' things as much as you do about art!"
They are absolutely correct: Yes, some music passage, or a scene in a play, or an image, or a hand-written poem will make me cry; yet, most people with whom I work can't even imagine tears in my eyes. And no, I didn't get an extra bonus. And I don't consider this my personal vocation. But the circumstances of my life made this into my paying occupation and I have to measure myself by my own standards: as long as I must waste a huge chunk of my life on making other people rich, I'd better do it to the best of my abilities. Why other CFOs don't feel like that? Well, everyone probably has her own story, but mostly it's that plunging-quality-of-everything effect I like to write about so much. It's pervasive.