Auctions Price Out the Second Buyer

A brokered process is a machine for extracting the highest price from the most eager buyer. That is its job, it is good at its job, and every buyer inside one should hold the design in mind: if you won, you paid the most that anyone with full information was willing to pay.

This is not an argument against brokers — I built a brokerage practice, and intermediated deals are the honest majority of the market. It is an argument about where an acquirer’s advantage can possibly live. Structuring skill is table stakes. Capital is a commodity. Operating plans are copied. The one asymmetry left is arriving first — reaching an owner before a process exists, when the conversation is about fit and stewardship rather than about the third round of best-and-final.

Manufactured, not networked

The standard objection is that proprietary flow is a relationships business, and relationships don’t scale. Half right. The relationship — the actual conversation with an owner about the thing they built — does not scale and should not. Everything before that conversation scales enormously: defining criteria, constructing the universe, enriching it, drafting outreach that demonstrates real research, and keeping a hundred threads warm without dropping one.

That is a production system. We build it as one: software carries the preparation, a person carries every conversation, and a gate sits between them so nothing reaches an owner that judgment hasn’t read. The output is not “more deals.” It is a different population of deals — the ones that were never for sale until someone asked well.

The note-to-self version, which is also the falsifiable version: count how many of your last ten letters of intent originated outside a process. If the answer is zero, your acquisition strategy is an auction strategy, and your returns will be auction returns.