The Monarch Migration

As I drive south through Texas, millions of monarch butterflies are flying north on their way to Canada. Little amber dots reflect the sun all around me, so thick in the air that it could be a Hitchcock scene. As ten more of them collectively go “splat” on my windshield, I beg them out loud, “why won’t you just fly over me?!” Though it was not the best day to drive, my trip could not wait another day.

I’ve got an important meeting with Mr. Johnson, an ornery rancher whose signature is the last piece I need to close a land sale. He doesn’t open his mail, won’t stay on the phone for more than three minutes, and has no concept of email. Foreseeable logistical challenges, but the real issue is that he just doesn’t want to deal with me. I’m going to change all that today…at a Dairy Queen.

I’ve always been fascinated by the way people behave in negotiations. Why do some succeed and others fail? I’m convinced that a successful negotiation hinges on making the other party feel like an equal, whether the two sides seem equal or not.

This can take extra work when one side is more educated, more sophisticated in the business, or is coming from a big city. The less-educated, less-sophisticated, less-metropolitan person can get sensitive. Suddenly the negotiation becomes about their insecurities, not the practical terms, and the deal can fly off the rails.

I call this Projecting Parity. It is more than just treating someone like an equal. It requires more thought and intention.

See’s Candies

Two people that inspired my ideas about projecting parity are Warren Buffett and Charlie Munger, the managers of Berkshire Hathaway. Though they come into every negotiation with more investing experience and money, they find a way to make the other side feel comfortable.

In 1972, they purchased See’s Candies from the founder’s grandson for $25 million. According to the story told in the 2017 shareholder meeting, they took time to talk with the grandson in person. The two sides stalemated for a while, with the grandson wanting $30 million and Berkshire wanting to pay $25 million.

The grandson eventually gave in, but later had second thoughts about whether he wanted to sell the company at all. He was torn between running the family business and cashing out to sow his wild oats. Charlie had dinner with the grandson and talked all about “the merits of girls and grapes over having a candy company.”[i] The grandson completed the deal. Since then, Berkshire has made $2 billion selling See’s boxed chocolates.

What was the value of projecting parity in the See’s Candies purchase? Charlie and Warren created an atmosphere of equality and mutual respect that kept the conversation open, even as the two sides refused to budge. See’s is only one example of a family business that Berkshire has purchased by projecting parity. Berkshire’s style gives them a reputation that will bring quality deals to their doorstep for decades to come.

Texas Stop Signs

With these lessons in mind, I drive through the one stoplight in town and pull into a dusty Dairy Queen. Dairy Queen signs are also known as “Texas Stop Signs.” Ask any Texan where the best DQ is and they will spend a few minutes unpacking their opinion. It will go something like, “The DQ is my town is the best, but I’ll tell you, one time I was driving out to Abilene and stopped at one that really surprised me.”

Mr. Johnson’s favorite DQ is his local. I could have planned this meeting many different ways, but I’m optimistic that projecting parity in this way will have the best chance of persuading Mr. Johnson to accept what are objectively good terms.

I recommend the tacos. The shells are fresh today.” Mr. Johnson says. I take his advice and enjoy the crunch of a fresh taco shell as we talk about whatever’s on his mind. He sips a coffee, scans the parking lot, and smirks when he spots my car. “Looks like you met with the monarchs…you might want to stop at the car wash when you get home.”

We then spend the next hour walking through all the questions that he did not feel like discussing with me before. Until today I was a voice on his phone, a name on a letterhead, a young city lawyer too important to sit down with him.

I left the DQ with signed documents in hand, comforted to know that projecting parity works.

Why This Matters Now: Baby Boomer Family Businesses

For investors of all sizes, the moment to embrace projected parity is here. Baby Boomers are expected to sell or give to their children $10 trillion worth of small businesses in the next two decades.[ii] The market value of these family businesses will range from hundreds of thousands of dollars to hundreds of millions. Some of them are absolute gold mines, built from nothing over decades by entrepreneurs without professional training or fancy credentials.

Anyone hoping to buy one of these businesses will have to notice and respect the sensitivities of the founders and their families. A person that can project parity will be in the best position to reach an agreement and complete the sale.

Picture yourself as an investor or M&A lawyer, meeting with either the founder (an old codger) or the founder’s children or grandchildren. What about you might make them feel awkward? What actions would you take to project parity with them?


I wrote this essay as part of an amazing writing course, Write of Passage. Thank you so much to Chris Wong, Promeet Mansata, Henk Bruinsma, Jack Loughran, and Landon Leininger, for being so gracious with their time and thoughtful with their editorial comments. I owe you all big time!

[i] To hear this story from the horse’s mouth, go to this link: (https://youtu.be/Z0-ff38ldlA?t=1625). [ii] https://cabb.org/news/baby-boomers-incredible-numbers-are-buying-and-selling-businesses-part-1-2