A brilliant idea, an innovative product, and a solid team are fundamental pillars for a startup's success. However, there is an often-underestimated skill that can make the difference between success and failure: negotiation. A founder negotiates daily, and not just to secure funding. From agreements with suppliers, to strategic partnerships, to employee contracts, and even meetings with potential investors, the ability to conduct an effective startup negotiation is a crucial skill. In this article, we explore the principles and negotiation strategies that every entrepreneur should master to build a solid and lasting business.
The art of negotiation, not just investment rounds
When one thinks of negotiation in the startup world, the first image that comes to mind is that of a founder negotiating with an investor for a funding round. It's an important moment, but it's only the tip of the iceberg. Negotiation strategies are applicable to every aspect of a company's life:
With co-founders: from initial equity, to responsibilities and project vision.
With key employees: to define salaries, stock options, and roles.
With suppliers and strategic partners: to get the best possible conditions.
To succeed, it is essential to master some key principles:
Know your worth: you are not there to ask for a favor, but to present a valid investment opportunity, and the numbers prove it.
For a deeper dive, read: link to related article.
The pitch deck as a starting point: your pitch deck is not just a presentation, but the first act of your negotiation. It must be convincing and based on solid data to get the most confidence and attention. To learn how to create a winning one, read: link to related article.
The terms of the contract (Term Sheet): a good founder must know how to read and negotiate every clause of the Term Sheet, from equity to governance, to protect their own and the company's interests.
Negotiation as a tool for growth
Startup negotiation is a fundamental skill that is learned with experience, preparation, and, at times, with a few mistakes. Don't see it as an opportunity to get the most for yourself, but to find a solution that is advantageous for both parties. An agreement based on collaboration and respect is a stronger and more lasting agreement. Learning to negotiate strategically will give you the control you need to guide your startup toward success.
Geentoo, the network of ideas, connects you with co-founders and experts who can give you the advice and preparation you need to face every type of negotiation. With the right network, every agreement becomes a step forward for your company.
