What is a “daisy chain? It’s simply getting involved with another finder who is not the direct representative of the Principal, but probably claims he is working with another finder who claims he is. The third finder, wishing to impress other finders with his closeness to top principals, may be, in turn, only dealing through a fourth, fifth, sixth, even up to ten, twelve or more other finders.
Once you get sucked into such a web, you are starting out on a trip to Nowhereville! The whole thing is a vicious circle: much like the small mail order dealers who “co-publish” all kinds of ad sheets and cheap mimeographed magazines and do nothing but try to sell to each other.
In short, you’ll end up in a market that is no market; you’ll waste your time and money and brain energysenselessly and, 999 times out of every 1,000, fruitlessly. A barrel of crude oil, for instance, can stand an absolute maximum of about 3 cents per barrels in total fees added. (This field, crude oil, is one of the very best big moneymaking areas of the finding business).
If you’re dealing with just one other finder on such a deal, fine – you’ll both pocket a small fortune on, say, a sale of 500,000 barrels at 1-1/2 cents to you, and 1-1/2 cents to the other finder. For example, a total of eight are in the act, and all demand 3/4 cents each. The deal is killed, and nobody gets paid.
The “daisy chain” can ruin your various deals in other ways. Many of these finders will sometimes send you a name and say, “try this” (for whatever deal they happened to get wind of that you’re working on). Later, if the deal goes through, one will claim that he was vitally instrumental in it, wave his correspondence,send photocopies to you, and perhaps threaten suit if you don’t split with him.
Most often, these leeches are about as bothersome as flies lighting on you while you’re trying to sleep, you can’t always afford to completely ignore the “try this” letter. If and when they come in, the first thing to do is match dates. If the dates on your correspondence precede his, forget it. If there is any question at all, reply that you already have been working on it (whatever deal). Quote the date that you started, and cite any full authorization exchanges of letters or formal contract that you might have in your possession. This will usually make him back off, and you’ll never hear from him again.
On the other hand, sometimes working in the “daisy chain” is the honest, hard working finder. One rule of thumb, in order to determine how close to the principal he is, is to elicit from him full details of the requirements. If he can supply these to you, chances are he’s close, perhaps only one other finder or broker away from the principal. A three-way split of a Finder’s fee is about the maximum you’ll want to go. Obviously, two ways is better, and a single fee – yours is ideal.
When dealing with other Finders, it’s usually quite easy to separate the men from the boys. The professional Finder will be euphonious. He/She will give elaborate particulars on good stationery in a crisp, business like way. The amateur, or no-work/big-profit leech-type will send you the “try this” letter, too often on shoddy paper with no details (simply because he/she doesn’t have any), or just the few general details he picked up from an ad or a directory.
To sum it up: Avoid the “daisy chain” as much as possible. When you must deal with other finders, and sometimes this is essential, try to limit the number to three, and no more, on any one transaction.
You ready to make some money?
Let’s Get Busy!
Remington J Penman