While watching the Sopranos tonight, I saw the magic manilla envelope stuffed with cash get passed to Tony and thought “what would a good deal be without some fees?” Remember – it is important to make sure that the lawyers and bankers can afford their fancy sports cars. A letter of intent will usually be explicit about who pays for which costs and what limits exist for the seller to run up transaction costs in the merger. The transaction cost associated with an agent or banker, the legal bill, and any other seller-side costs are typically included in the transaction fee section. While it’s conceivable that the buyer will punt on worrying about who covers transaction fees, in today’s M&A world most savvy buyers are very focused on making sure the seller ends up eating these, especially if they are meaningful amounts.

If you were interested in my post earlier this week about the closing of the Colorado Institute of Technology, you’ll find Al Lewis’s weekend column – which is a sharp commentary on the Colorado Institute of Technology – a useful compliment, both in terms of some of the details of the events around CIT as well as the spin from Mark Holtzman, current Republican gubernatorial candidate and the effective co-founder of CIT with Colorado Governor Bill Owens when he was Colorado Secretary of Technology.

I’ve got to know Ben Casnocha well over the past few years. He’s a remarkable kid – and I say “kid” respectfully even though he recently turned 18. Ben visited me and Amy a few weeks ago and we had a great time – one of the things we talked about were the colleges that Ben has been accepted to and his plan to take a “gap year” (a year between high school and college) to go travel around the world. He just launched a new blog called Ben’s Gap Year Travel Adventures – I expect this will be a fascinating and incredibly educational blog. Europe is up first in June and July.

A close friend of mine is spending a year traveling around with world with his wife and 11 year old daughter. They are in China right now and he’s been sending me missives from the front lines of his trip. Most of what I read these days about China is either highly political, technology-oriented, or about the venture capital industry’s fascination with China. My friend’s emails have been decidedly different (while he’s a successful technology entrepreneur, his trip is about a personal adventure that his family has embarked upon.) I confirmed with him that I could blog some of his rants – enjoy.

I finally got around to downloading my Boston Marathon data from my Garmin 301. I thought the GPS based data was extremely interesting, especially when compared to the official course elevation map. Following is the official elevation map: Following is the map from my GPS post race: Notice all the hills that get smoothed out in the official map, especially between miles 15 and 23.

Since it’s a Saturday morning, I thought I’d cover a topic in our Letter of Intent series that my wife Amy would never agree to. Signing a letter of intent starts a serious and expensive process – for both the buyer and seller – as you both work to consumate a deal. As a result, you should expect that a buyer will insist on a no shop provision similar to the one that we discussed in our term sheet series. In the case of an acquisition, no shop provisions are almost always unilateral, especially if you are dealing with an acquisitive buyer. 

I haven’t been out to see a movie in a while (I don’t know why – Amy and I love movies at the theater.) Last night we saw Thank You For Smoking. It was brilliant. I thought the Christopher Buckley book Thank You for Smoking was an absolute riot when it came out. The movie is based on the book and does a superb job of telling the same story while updating it a little. Aaron Eckhart was phenomenal as the main character (a cigarette lobbyist) and William H. Macy continues to be the sleeper actor of the universe for his portrayal of the Vermont senator who wants to put poison labels on cigarettes.

Roger Fillion has a very instructive article in this week’s Rocky Mountain News about the closing of the Colorado Institute of Technology. I remember when CIT was launched in 1999 with great fanfare by Colorado Governor Bill Owens with the vision of creating “the next Caltech or MIT.” I remember feeling that while the vision was huge – it was nonsensical and not particularly well informed about what created the underlying and sustainable basis for something like Caltech or MIT.

When you are asked “Hi – it’s been fun to date. Will you marry me?” you usually don’t expect the person asking the question to say “Oh – and it’ll only happen if my mother says it is ok.” (although I expect this happens occasionally, especially if the person asking hasn’t had enough therapy.) Buyers are like this and will normally include certain conditions to closing in the LOI. These can be generic phrases such as “Subject to Board approval by Acquirer,” “Subject to the Company not having a material adverse change,” or “Subject to due diligence and agreement on definitive documents.” They can also be phrases that are specific to the situation of the seller such as “Subject to the Company settling outstanding copyright litigation,” or “Subject to Company liquidating its foreign subsidiaries.” We generally don’t get too concerned about this provision, because any of these “outs” are very easy to trigger should the buyer decide that they don’t want to do the deal.