4 ms·

This looks like classical negotiation tactics from people knowing how to play hardball. They try to take control of the situation by setting limits to the offer

This looks like classical negotiation tactics from people knowing how to play hardball. They try to take control of the situation by setting limits to the offer. YOU DON'T HAVE TO ACCEPT THESE LIMITS !!! THIS IS A CLASSICAL NEGOTIATION TRAP NEWBIES FALL INTO !!! THEY WILL TRY TO MAKE YOU BELIEVE THAT SURRENDERING TO ANY OF YOUR COUNTER REQUESTS IS A VALUABLE CONCESSION. IT IS NOT. THEY HAVE SET THE OFFER FAR TOO LOW FOR THAT SPECIFIC REASON !!! DON'T FUCKING BUY IT !!! Guys, you have to learn to play bitches: i) be very patient (time is on your side, you are profitable), ii) talk to other interested parties (i.e. confront the offers to raise the price, and yes I mean multiple rounds; one shark smell blood? get more sharks in the pond! now is the right time!!), iii) don't show you cards, reveal your intentions or commit now, because you are in the process of finding what your intentions are and it depends of theirs too, iv) set YOUR own rules ON THEM whenever necessary (have no hard feelings about it, because they don't have any for you by making a low offer; from your own description, they are not being nice to you), v) never ever buy into whining and strong or manipulative emotions from other parties, they know how to play bitches like you don't (and sometimes, bitches fake friendship, caring and honesty very well; they send the nicest guy/lady, the one that has the highest chance to win your sympathy; it is nothing more than fucking smoke to get a better deal than they actually deserve; YOU did the hard work). If you don't feel comfortable enough, find an independent professional negotiator with strong AND proven experience who can do that job for you. Discuss the limits within which you are ready to sell and list what you consider acceptable and unacceptable terms. Be honest and candid about it, no early concessions. Then, (re)open discussions starting with the double (at least). Reward the negotiator with a percentage of the deal. Pay him well, because he/she will obtain a value that you will never ever be able to obtain yourself considering your experience in negotiations. The hardest thing to understand (or to remember) is that 'no deal' is better than a 'bad deal' in your case. You must be ready to consider that option as the best option, especially if there is no zone of possible agreement between you and the other parties. Negotiating IS PRECISELY about finding out if there is such a zone. And don't listen to those saying you should turn the offer down because 20% 'is an insult'. They are ignorant morons of no value (really). Now is SURELY NOT the time to quit discussions. You are in the power position, but you don't act like you know it, or that you know how to play it. Take your time. Buy no drama. No rush. Let your brains run this show, not your hormones.

gfodor 16y ago
Listen to this guy. I've been lucky enough to go through this process before, and patience and confidence that it will be alright if the deal falls through is your best asset. Keep a cool head, keep running your business well, and remember that their initial offer that you've received is likely nothing like the final offer you will have on the table if you negotiate based upon this confidence. I definitely would say be careful about "shopping around" as others have said -- this can be effective but often times as long as the other party knows that you're capable of shopping around successfully this can apply just as much pressure without poisioning the well of the negotiations. If you're shopping around, it's hard to tell the person who is looking to buy you that you sincerely think they are the best place for you to continue on your startup's mission. On the terms themselves: first, make sure you have something in there that will accelerate if you get terminated without cause. This is pretty much standard. Second, having no realized stock or cash at close is absolutely insane, particularly if you have a profitable business that has been around for 5 years and you're expected to stick around for 4 years. Make it clear that if you really are going to give them your business and also 4 more years of your time you expect to be well compensated at close and over those 4 years.
- jacquesm 16y ago
  > Second, having no realized stock or cash at close is absolutely insane Yes, especially given the situation as described. There is an enormous amount of really good stuff in this thread if I get around to it I'll summarize it in to an article, it's quite the goldmine.
  - LogicHoleFlaw 16y ago
    Please, please do. I will read it.
anonfoobar 16y ago
Agreed on quite a few of these points.
jacquesm 16y ago
Good stuff, all of it. Especially the point about getting an experience negotiator in there, you are not the right person at the table because you have too much riding on this deal.

gfodor 16y ago

Listen to this guy. I've been lucky enough to go through this process before, and patience and confidence that it will be alright if the deal falls through is your best asset. Keep a cool head, keep running your business well, and remember that their initial offer that you've received is likely nothing like the final offer you will have on the table if you negotiate based upon this confidence. I definitely would say be careful about "shopping around" as others have said -- this can be effective but often times as long as the other party knows that you're capable of shopping around successfully this can apply just as much pressure without poisioning the well of the negotiations. If you're shopping around, it's hard to tell the person who is looking to buy you that you sincerely think they are the best place for you to continue on your startup's mission. On the terms themselves: first, make sure you have something in there that will accelerate if you get terminated without cause. This is pretty much standard. Second, having no realized stock or cash at close is absolutely insane, particularly if you have a profitable business that has been around for 5 years and you're expected to stick around for 4 years. Make it clear that if you really are going to give them your business and also 4 more years of your time you expect to be well compensated at close and over those 4 years.

jacquesm 16y ago
> Second, having no realized stock or cash at close is absolutely insane Yes, especially given the situation as described. There is an enormous amount of really good stuff in this thread if I get around to it I'll summarize it in to an article, it's quite the goldmine.
- LogicHoleFlaw 16y ago
  Please, please do. I will read it.

anonfoobar 16y ago

Agreed on quite a few of these points.

jacquesm 16y ago

Good stuff, all of it. Especially the point about getting an experience negotiator in there, you are not the right person at the table because you have too much riding on this deal.