Darin Oliver
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FrameworksThe Leverage Gap

The Leverage Gap

A framework for understanding the difference between creating an opportunity and retaining the power to control its outcome.

Overview

The Leverage Gap helps you see what is shaping the outcome beneath the surface.

A framework for understanding the difference between creating an opportunity and retaining the power to control its outcome.

The Leverage Gap helps you see what is shaping the outcome beneath the surface.

The elements

  1. 1

    Creation

    The insight, relationships, and early work that make a transaction possible.

  2. 2

    Capital

    The financial power that determines who can fund, wait, and negotiate.

  3. 3

    Control

    The ownership, governance, information, and termination rights that survive closing.

  4. 4

    Optionality

    The credible alternatives that prevent commitment from becoming desperation.

How to use it

  1. 1

    Before pursuing a deal, separate the value you can create from the power you will retain afterward.

  2. 2

    Review ownership, voting rights, board control, dilution, termination, and transfer terms before your leverage disappears.

  3. 3

    Build alternatives early enough that walking away remains real.

Common pitfalls

  • Treating capital as the only form of leverage.
  • Assuming originators automatically retain influence.
  • Mistaking a large percentage of a weak deal for meaningful control.

Essays that explore this framework

2 essays available

View all writing →

Buying Madoff

How I acquired Bernie Madoff’s market-making business—and learned that creating value and retaining it are entirely different skills.

8 min listen

The Opportunity I Couldn’t See

While I was consumed with buying Madoff’s market-making business, one of the best opportunities of my career called me directly. I told him I did not have time.

8 min listen