Source: Hinshaw

1) The third guy makes all the money - in real estate, the first developer in a new submarket starts with bigger margins, but the length of time needed to make the market and the risks often kill the profit, and those guys regularly go under.  The second guy rides the coat-tails of the first, and doesn’t have the length of time issue, but usually still makes mistakes on the product, but the third guy gets the benefit of the market being established, and seeing the mistakes the first two made.  He generally succeeds.  Same is true for entrepreneurs – first it’s your own money, then debt if you can get it, then the guy who comes in last to put equity in gets to name his terms.  I’ve even seen this to be accurate with new product launches trying to “make a market”.  Of course, there are always exceptions. 

2) The negotiator with the most time wins – invariably the guy who has the most pressure to close will give up the most to make the deal work.

3) Commit everything to writing – partnerships, transactions, meeting minutes, whatever.  Handshakes have no memory.  The other guy’s partners won’t remember the agreement either when the guy you’ve been dealing with vanishes.

4) Everyone in a deal needs to share the pain – the guy without any skin in the game won’t hang around.  In fact, he’ll be useless.