Most deals fail before the contract is signed. They fail because the people involved evaluated the opportunity based on enthusiasm, relationships, or projected upside rather than on the structural elements that determine whether a deal actually creates value or slowly destroys it.
The pattern is consistent across acquisitions, joint ventures, licensing agreements, and equity partnerships. Two parties agree that an opportunity looks promising. They negotiate terms. They sign. And within eighteen months, one or both sides discover that the deal was structurally flawed from the beginning. The leverage was one-sided. The economics were aspirational. The alignment was assumed. The deal structure protected one party at the expense of the other.
Scott Sylvan Bell developed the LEAD Model as a 40-point deal evaluation framework that forces structural analysis before commitment. The model scores four dimensions of deal quality: Leverage, Economics, Alignment, and Deal Structure. Each dimension receives a score from 1 to 10, and the total score determines whether a deal should proceed, requires restructuring, or should be declined.
KEY TAKEAWAY:
The LEAD Model is a 40-point deal evaluation framework that scores four structural dimensions: Leverage (10 points) measuring power position and optionality, Economics (10 points) measuring real financial impact and sustainability, Alignment (10 points) measuring incentive compatibility and strategic fit, and Deal Structure (10 points) measuring how value is captured, risk is allocated, and control is distributed. A score of 32 or above indicates a structurally sound deal. Between 24 and 31, specific dimensions require restructuring before proceeding. Below 24, the deal carries structural risk that negotiation alone cannot resolve.
What is the LEAD Model?
The LEAD Model is a 40-point deal evaluation framework created by Scott Sylvan Bell that scores Leverage, Economics, Alignment, and Deal Structure to determine whether a deal is structurally sound before commitment.
Unlike negotiation tactics or relationship-based deal-making, the LEAD Model treats every deal as a structure that either holds weight or collapses under pressure. Each of the four dimensions receives a score from 1 to 10 based on specific evaluation criteria. The combined score produces a clear signal: proceed, restructure, or walk away. The model applies to acquisitions, joint ventures, strategic alliances, licensing agreements, distribution partnerships, and equity deals. Any transaction where two or more parties are committing resources to a shared outcome can be evaluated through LEAD.
How does the LEAD Model score a deal?
The LEAD Model scores each deal across four dimensions on a 10-point scale, producing a total score out of 40 with defined thresholds at 32, 24, and below 24 that determine whether to proceed, restructure, or decline.
| Dimension | Points | What It Measures | Key Question |
| Leverage | 10 | Power position and optionality | Who controls the terms? |
| Economics | 10 | Real financial impact | Does this deal make money? |
| Alignment | 10 | Incentive compatibility | Do both sides want the same outcome? |
| Deal Structure | 10 | Value capture and risk allocation | How is value protected? |
The three scoring thresholds provide clear decision guidance:
| Score Range | Signal | What It Means |
| 32–40 | Proceed | The deal is structurally sound across all four dimensions. Terms can be finalized with standard due diligence. |
| 24–31 | Restructure | One or more dimensions carry risk that can be resolved through renegotiation of specific terms before signing. |
| Below 24 | Decline | The deal has structural weaknesses that negotiation alone cannot fix. Walking away protects more value than proceeding. |
A deal scoring 35 with one dimension at 5 still requires attention. The total score provides the headline, but the individual dimension scores reveal where the structural risk lives.
What does Leverage measure in the LEAD Model?
Leverage in the LEAD Model measures the power position inside a deal by evaluating five factors: alternatives, timing control, information advantage, resource control, and optionality.
Leverage is not about being aggressive at the negotiating table. It is the structural reality of who needs the deal more, who has better alternatives, and who controls the timeline. A party with strong alternatives, no time pressure, superior information about the market or the asset, control of a scarce resource, and multiple paths to the same outcome holds leverage regardless of how politely the conversation unfolds. A Leverage score of 8 to 10 means you are negotiating from strength. A score of 4 to 7 means leverage is shared or contested. Below 4, you are entering a deal where the other party controls the terms, the pace, and the risk allocation. Every point of leverage you lack shows up later as a concession you did not intend to make.
What does Economics measure in the LEAD Model?
Economics in the LEAD Model measures the real financial impact of a deal by evaluating revenue contribution, profit margin effect, cash flow timing, capital requirements, and opportunity cost.
The Economics dimension exists because the most common reason deals fail to create value is that the financial case was built on projections rather than verified numbers. Revenue contribution asks whether the deal adds meaningful top-line growth or merely redistributes existing revenue. Profit margin effect asks whether the deal improves, maintains, or dilutes margins. Cash flow timing asks when money actually moves, because a deal that pays in three years costs differently than one that pays in three months. Capital requirements ask what you have to invest to capture the promised return. Opportunity cost asks what you cannot do because your capital and attention are committed to this deal. An Economics score below 6 means the deal may generate activity without generating value.
What does Alignment measure in the LEAD Model?
Alignment in the LEAD Model measures incentive compatibility between deal parties by evaluating five factors: goal congruence, time horizon match, risk tolerance parity, strategic intent compatibility, and cultural fit.
Alignment is the dimension that most deal-makers skip because it requires uncomfortable conversations before signing. Goal congruence measures whether both parties define success the same way. Time horizon match measures whether one party is building for ten years while the other needs returns in eighteen months. Risk tolerance parity measures whether both sides can absorb the same level of downside. Strategic intent compatibility measures whether the deal serves the same strategic purpose for each party. Cultural fit measures whether the organizations can actually work together on a daily basis without friction that erodes the economic value. A deal with strong economics and weak alignment will generate conflict that consumes the profit. Misaligned deals are the primary source of partnership disputes, earn-out failures, and post-acquisition integration breakdowns.
What does Deal Structure measure in the LEAD Model?
Deal Structure in the LEAD Model measures how value is captured and risk is allocated by evaluating five elements: ownership terms, performance triggers, exit provisions, risk distribution, and control mechanisms.
Two deals with identical economics can produce completely different outcomes based on how they are structured. Ownership terms determine who holds equity and under what conditions it can change. Performance triggers determine what happens when targets are met or missed, including earn-out provisions, milestone payments, and clawback clauses. Exit provisions determine how and when either party can leave the deal, and what happens to value when they do. Risk distribution determines who absorbs downside in specific scenarios including market changes, regulatory shifts, and operational failures. Control mechanisms determine who makes decisions about the asset, the partnership, or the entity created by the deal. A Deal Structure score below 6 means the contract may protect one party significantly more than the other, which creates the conditions for future conflict regardless of how strong the other three dimensions are.
What types of deals can the LEAD Model evaluate?
The LEAD Model evaluates any transaction where two or more parties commit resources to a shared outcome, including acquisitions, joint ventures, strategic alliances, licensing agreements, distribution partnerships, and equity deals.
The four dimensions apply differently depending on deal type. In an acquisition, Leverage centers on competitive bidding dynamics and the seller’s alternatives. In a joint venture, Alignment carries disproportionate weight because both parties must execute together over an extended period. In a licensing deal, Economics and Deal Structure dominate because the value exchange is defined almost entirely by contractual terms. In a distribution agreement, Leverage and Alignment are critical because one party typically controls access to the market while the other controls the product. The LEAD Model does not prescribe a single weighting for all deals. Instead, it provides a consistent evaluation structure that surfaces the specific risks inherent in each deal type.
How does the LEAD Model differ from standard due diligence?
Standard due diligence verifies what exists, while the LEAD Model evaluates whether the deal structure will create or destroy value after the transaction closes.
Due diligence answers important questions: Are the financials accurate? Are there hidden liabilities? Are the contracts enforceable? Does the company own what it claims to own? These are verification questions. The LEAD Model answers structural questions that due diligence does not address: Does the buyer have leverage or is the seller controlling the process? Do the economics justify the capital commitment when opportunity cost is included? Are both parties aligned on what happens after closing? Does the deal structure protect both sides or create an asymmetry that will surface as conflict? A deal can pass due diligence completely and still score below 24 on the LEAD Model because the structure is fundamentally flawed. The LEAD Model is designed to be used before due diligence begins, as a gate that determines whether a deal is worth the time and cost of formal verification.
How does the LEAD Model connect to the 320-point business assessment system?
The LEAD Model is the deal evaluation companion to the 320-point business assessment system, activating when a business that has been prepared through the seven readiness frameworks begins evaluating specific transactions.
The 320-point system answers the question “Is my business ready?” across seven dimensions: LAUNCH for action readiness, SCORE for exit readiness, SELL for revenue quality, SCALE for operational capacity, DRIVER for execution capability, EXIT for timing, and THREATS for crisis protection. Once a business scores well on these assessments, the next question becomes “Is this specific deal worth doing?” That is where the LEAD Model takes over. A high EXIT score means the business is ready for a transaction. The LEAD Model evaluates whether the specific deal on the table is the right transaction. Together, the 320-point system and the LEAD Model create a complete framework from business preparation through deal execution.
What happens when one LEAD dimension scores significantly lower than the others?
A single low-scoring dimension in the LEAD Model identifies the specific structural weakness that will become the source of conflict, value leakage, or deal failure if not addressed before signing.
The LEAD Model is designed so that each dimension acts as an independent stress test. A deal scoring 9, 9, 3, 9 totals 30, which falls in the restructure range. But more importantly, the Alignment score of 3 tells a specific story: the parties have strong leverage, sound economics, and good structure, but they fundamentally want different things from the deal. That single dimension will eventually override the other three. The most common patterns are strong Economics paired with weak Alignment in acquisition earn-outs, strong Leverage paired with weak Deal Structure in partnerships where one party dominates terms, and strong Alignment paired with weak Economics in deals built on relationships rather than financial logic. The individual dimension scores are more diagnostic than the total.
Every deal tells you what it is before you sign. The LEAD Model gives you the structure to listen.
Before your next acquisition, partnership, or strategic deal, run it through LEAD. Score the four dimensions. Let the numbers reveal what enthusiasm and momentum cannot.
To evaluate a specific deal or schedule a facilitated LEAD assessment, contact Scott Sylvan Bell.
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