Brad Jacobs

And if the risk does happen, is it fatal?

Does it destroy the whole investment thesis?

So you really got to get both of those things.

And I write in the book about a friend of mine who's done a lot of M&A once showed me a four quadrant chart of M&A.

And the top two quadrants were large, easy deals with no hair on them, which don't exist.

Below that, on the bottom part of the four quadrants, are small, hairy deals.

Nobody should do a small, hairy deal.

First of all, it's small.

So how are you going to create a lot of money doing a small deal?

And it's hairy.

So if you take the hair off, it's a small deal.

You're not going to make a lot of money on it.

And then the quadrant in the bottom right are small, unhairy deals.

Straightforward, easy, no problem deals.

But they're small.

So it's not going to work.

Which leaves you...

with the most important quadrant up in the upper right-hand one, which are large, hairy deals.

And that's where you make the big money.

You make the money on large deals that certainly they have issues, but they're issues that you've thought through, you've analyzed, and you have figured out how you're going to solve them, how you're going to address them.