Weaponizing deal structure, the safe asset illusion, and AI models

The Carry · July 12th. 6 min 0 sec.

Cold open

A seller locks the data room the minute you sign the LOI. You could hope for the best. Or you could build mandatory CEO-level escalation triggers directly into your process. Buyers are weaponizing their deal structures to expose seller fiction. They force targets to be completely transparent. The balance of power is shifting.

Intro

This is The Carry for July 12th. I went through all the top private equity podcasts this week so you do not have to. Here is exactly what actually mattered for deals and capital. I am West. Let us get into it.

Weaponizing deal structure

Let us start with deal structure. Buyers are using it offensively to expose seller fiction. Jeremy Segal broke this down on M and A Science. He talked about how Progress handles targets that suddenly get quiet. Think about a seller locking down the data room right after the LOI is signed. Progress codified an Orange Flags system during their MarkLogic deal to handle this exact scenario. When access to the target team evaporates, they trigger mandatory CEO-level escalations. They literally weaponize the structure of their M and A process. They demand transparency. They force the issue every single time. If the seller pushes back, they walk away. It is the ultimate test of deal discipline. You are building tripwires into your term sheets. When those tripwires snap, you get the real story immediately. Here is why that matters to you. Structuring your access is the best way to avoid adverse selection. David Weisburd made a very similar point on How I Invest, looking at venture capital. He limits his risk by rigidly structuring how he accesses deals. He only partners with high-conviction emerging managers. Or he invests when a top-quartile fund is making its absolute first investment in a company. By locking down exactly how he gets onto a cap table, he weeds out the fiction of weak assets. He relies purely on the true conviction of top-tier players. Deal structure is a living filter. It actively separates the pristine assets from the desperate sellers.

The end of the spreadsheet grind

The manual grunt work of private equity is officially on the way out. Caroline Phipps laid out a very clear timeline on the Private Equity Funcast. Within a single year, AI agents will handle the vast majority of CRM logging. The days of junior associates functioning as highly paid data-entry clerks are ending. Tarun Amasa took it a step further on the same episode. He sees investment professionals transforming into orchestrators. They will act like train conductors. They will direct the workflow and guide the intelligent agents. Think about what happens when the operational friction disappears. When every fund automates their spreadsheets, brute force stops being an advantage. Your only remaining differentiator becomes your access to exclusive information. David Weisburd hammered this home on How I Invest. He said the true eighth wonder of the world is the compounding of brand and access. Once AI levels the analytical playing field, human networks become everything. Your ability to secure unique insights will drive long-term success. Wealthy families often lose their fortunes by the third generation purely because they fail to pass down institutional knowledge and deep relationship networks. The exact same principle applies to your firm. You need to build a brand that compounds. You need access that machines cannot scrape. That is where the alpha lives now.

David Weisburd

We heard a fascinating take on wealth preservation from David Weisburd this week on How I Invest. He was breaking down why accumulating capital means absolutely nothing without the right networks to sustain it. Einstein famously said compound interest was the eighth wonder of the world, but he was wrong. The ability to compound your brand and your access matters so much more. Financial capital can be easily lost or diluted over a few short generations. Cultivating a legendary brand and securing deep relationships ensures your firm stays in the room where the best deals actually happen.

Caroline Phipps

Over on the Private Equity Funcast, Caroline Phipps delivered a massive prediction about the future of junior talent. She and Tarun Amasa were discussing how intelligent agents will completely rewrite the daily operational grind of deal teams. I would bet in a year associates and analysts at PE funds are doing a lot less manual logging in the CRM. I would bet that most logging in the CRM is going to be automated by agents. That is a bold timeline for the death of junior-level data entry. Firms that adopt these agents early will free up their associates to actually source deals and build relationships.

Jeremy Segal

Strategic buyers are finally putting their foot down on frothy software valuations left over from 2021. Jeremy Segal explained exactly how Progress approaches these inflated expectations during his appearance on M and A Science. We are a financially disciplined buyer. We are not just going to go buy assets at 10, 15, or 20 times revenue multiples, that is just not in our DNA. Sellers desperately want past market conditions to dictate their current deals. Disciplined buyers ground their targets in current market realities and force private firms to abandon those outdated expectations entirely. You either adjust to the new cost of capital or you miss out on the exit completely.

The bottom line

Deal structures and exclusive access are quickly replacing brute force valuations as the sharpest tools in your arsenal. You have to weaponize your term sheets and lock down your networks. Meanwhile, AI is quietly preparing to rewrite the daily operational grind for everyone on your team. You need to prepare your firm for both shifts right now. That is The Carry. See you next Sunday.