1) Find

2) Negotiate

3) Diligence

4) Document

5) Finance

6) Operate

7) Exit.

Each gate carries a low probability of success and it’s a multiplicative system, meaning each probability of success must be multiplied by the other probabilities to get the odds of success. Even if each gate carried a 50% likelihood of success, which it doesn’t, your overall success rate would be about 1.5%.

I don’t say this to unnecessarily scare you, because miracles do happen. We’ve now done seven late-stage deals in 10 years at Permanent Equity. But you need to go into this space with your eyes wide open — It’s brutally hard, and for very good reason.