Waterbury Financial Strategies Inc CEO / Founder Rahim Thawer post this week “American Corporations: Are they incoherent of the Foreign Exchange Rate, Rupee Verses Dollar? ”
Recently Waterbury Financial Strategies Inc established an office in India primarily for Venture Capital & Private Equity including Advisory Services. We encountered that there is a great deal of Mergers & Acquisition activities that is taking place as well. Investment is made by foreign entities and corporations in various sectors in India from purchasing multi-billion dollar companies to simple ideas written on a plain sheet of paper.
A prevailing factor that stands out in most of these deals is simply the lack of placing a proper valuation on these ventures and failing to understand the culture! In simple terms, the foreigners, especially the American Corporations are Overpaying for these Companies and Ideas! Let’s not forget that the nation that is leading the innovation is no other then America! There is no doubt that India’s Economy is growing rapidly in certain sectors and Bangalore and Hyderabad are considered to be the center of software development. However, did we ever ask the question, who is funding these operations and at what cost?
The American Corporations have practically written a blank check to the Indians and now India’s Economy is more lucrative than ever before. If you ever happen to visit Silicon Valley you will encounter that most of the businesses are ran by no other than Indians and Asians. Not only are they dominating the Indian market but also the America as well. I am all for Globalization, however there has to be a mutual benefit for both the parties involved. Americans have failed to learn the power of negotiating; perhaps this is the very reason why we hate car salesmen so much. If a 10 year old kid in India can negotiate his way through a market buying fruits or running a small enterprises, running a tea shop why are we failing at it? Have we outsourced negotiating tools? Perhaps we should hire an Indian to come to America and help us deal with the car salesman?
My Fellow Americans, it is time we wake up and re-educated ourselves and learn other cultures and languages. If I can buy an Indian company for $50M why would I want to pay them $75M or $100M? This is the cultural difference we need to study, so stop reading about different kinds of spices used in saags and chapati. Constrain them in a position they cannot refuse your proposal. After all, $50M in many of these developing countries is a lot of money.
My Thoughts: Next time when you go to a grocery store, pay very close attention to any foreign nationals, whether they are from India or Korea and learn a thing or two how to get what you want at the price you set and not at the price that is set by the stores. One more thing, value of a purchase is perceived in dollars and cents and not percentage!
Happy Negotiating!
Rahim Thawer / CEO of Waterbury Financial Strategies Inc http://www.waterburyfs.com
About the Author
CEO / Founder of Waterbury Financial Strategies Inc.
