What are some of the ways to negotiate better as an entrepreneur? From even before day one as an entrepreneur you’ll be negotiating. The faster you get better at it, the better your startup will do.
From office space to hiring talent, bringing in cofounders, equipment, deals with suppliers, and sales with early customers, it’s all about negotiating. Obviously, those who are best at it will have an incredible advantage over the competition.
Perhaps one of the most important areas of negotiations for many of today’s world is going to be during startup fundraising with investors. So, how can you negotiate better as an entrepreneur?
1) Know Who You Are Negotiating With
You’ll have much more success in negotiating if you know who is on the other side of the table. That includes their representatives, agents, angel investors, VCs, and attorneys. Know their motivations, what makes them tick, the pain they are striving to avoid, and the pleasure they are searching for.
This can start with a simple Google search. You may want to ask around. The more you are prepared, the more power you’ll have when it comes to cutting a deal.
2) Listen Twice As Much As You Speak
We have two ears and only one mouth for a reason. Listen to what they are saying. Listen to what they aren’t saying. Don’t be afraid of silences. Let them talk first. Keep them talking as much as possible.
Be mindful of what you say. Too little is better than too much. In-person negotiations can sometimes be beneficial. Especially if you are a much stronger negotiator, in a much better position. Otherwise email and through the paperwork can help prevent you from selling yourself short.
If you are able to listen for concerns your closing rate will increase by a mile.
3) Know Your Boundaries
Chances are that there will be some back and forth negotiations. Know your limits. Know where you can give and stretch. Know when to stay firm, say no, and be willing to hold your ground or walk away. You might be surprised at the offers you get if you hold out. Just don’t be greedy and miss great opportunities.
Define these boundaries in advance. Know the tradeoffs you are willing to make. Otherwise, you’ll end up getting sucked into a deal you’ll regret later on.
4) Anticipate What’s Next
Just like a chess game you should be anticipating their next move in negotiations. If you did your homework on number one well, you should know how they’ll react. You want to be the one driving the negotiations. Not the other way around. Be willing to compromise and give concessions, but done well, you should already have these planned out.
5) Study Sales Skills
One of the distinct disadvantages many technical founders have in general is sales. Negotiation is all about sales. It’s one of the skills you’ll need to develop. You can and should hire for it. Though you’ll still need a good foundation yourself. Invest in learning about sales, down to the words you should and shouldn’t be using.
6) Get Good At Storytelling
Storytelling is a significant part of sales and negotiations. Tell an authentic one. Though tell the best story of your business and the potential for this deal and relationship. It can have a profound impact, even when you may otherwise be at an impasse or believe you are at a disadvantage to your competitors. Don’t be afraid to get help with this.
You should also be able to adjust your style and highlight different parts of your story for the situation and who you are negotiating with.
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