Let us never negotiate out of fear. But let us never fear to negotiate.”-John Fitzgerald Kennedy

     When reading through the chapters associated with negotiating in Winning Angels by Amis and Stevenson, I was reminded of this extraordinary quote from Kennedy which sets the precedent for me on the art of negotiations. As Amis and Stevenson put it, “the whole idea of negotiation is that both sides be better off after making the deal.” And, I couldn’t agree more. For me, whether undertaking the role as the entrepreneur or the investor, it is critical to understand every aspect of the deal so that my partners feel they are being legitimately compensated accordingly for their time, efforts and any money they’ve invested in the venture. I want to ensure that anyone who is associated feels that they are treated impartially and will subsequently want to do business should future opportunities arise. That’s the way it’s supposed to be, right?

     Although I understand that emotions have to be separated from business, I will always put a certain degree of feelings into anything I’m doing because I am passionate about my work. Because of this I want to assure my partners that their voices will also be heard, understood, and utilized in the decision-making process. Amis and Stevenson assert, “Just as you seek to advance the full set of your interests, the other side(s) will be doing the exact same thing. You should make assessing the full set of their interests a central part of your negotiation strategy.” They also go on further to note that in most cases, “A way to move stalled negotiations forward is to look behind conflicting positions to understand deeper interests.” In my opinion, when business partners are willing to go the extra mile to satisfy their colleagues it makes for a more gratifying experience once everyone’s interests are recognized, examined, and aligned to see how they can be structured to form the best deal for the venture to be viable, not just in the present but the future as well.

     Amis and Stevenson note, “By giving the entrepreneur their own proposed terms, it should be hard for them to regret it later.” They further expound on this idea perceiving that, “Connecting ownership to performance is a productive way to let them have their pie if they can do a great job baking it.” Although these business relationships should be built on a foundation of trust and integrity, as my colleague Trip Cogburn pointed out, this is not always a possibility. When business partners begin to collaborate on a deal, if they are unfamiliar with each other, this trust has to be earned and this task will not be completed in a day (that saying about Rome is fitting here). With that in mind it is crucial to negotiate intuitively and intelligently to build this relationship and consequently garner the trust that will be essential in making the important decisions down the road that will propel the organization to new levels of success. Amis and Stevenson remind their audience that, “aggressive negotiating does not foster trust.”

     In the event the negotiations cannot be completed objectively, hiring an attorney is always a judicious way to guarantee that the interests of everyone involved are protected and endorsed. If for some reason, the entrepreneur or investor is against this approach then you probably shouldn’t do business with them in the first place. I’ll leave you with yet another sound quote from my ole’ friend John (love this song), “You cannot negotiate with people who say what’s mine is mine and what’s yours is negotiable.” And honestly, who would want to?

 

References
A quote by John F. Kennedy. (n.d.). Retrieved June 18, 2020, from https://www.goodreads.com/quotes/804139-we-cannot-negotiate-with-people-who-say-what-s-mine-is

A quote by John F. Kennedy. (n.d.). Retrieved June 18, 2020, from https://www.goodreads.com/quotes/24920-let-us-never-negotiate-out-of-fear-but-let-us
Amis, D., & Stevenson, H. H. (2001). Winning angels: The seven fundamentals of early-stage investing. London: Financial Times Prentice Hall.

39 thoughts on “Negotiating

  1. So many of your points stood out to me both in the reading and then your description of it. In negotiations, it seems almost toxic to get caught up on a stand still. While some points you may feel like you can’t move off of, you should be able to walk around it to focus on other objectives throughout the process. You did a great job hitting on this point and some great strategies to do so.

    • I don’t know why, but it seems like this should be one of the easier tasks when you are doing business with individuals you trust and assume are not trying to get over. I am hopeful that when doing business I am intelligently selective about these processes to better ensure this is not an issue!

  2. Jake Martin says:

    Tiffany,
    Great job on the post. I think it was clever to bring in the quotes from Kennedy and tie them to your points. The negotiating process can be an emotional process as you pointed out. But, you are talking about people’s money and livelihood so I don’t know that you can 100% say that you need to leave emotions out of business. It’s part of life! Bringing emotions and passion to the table is something good so ling as you can direct your emotions in a positive way forward for the company!

  3. DUSTIN W BROWN says:

    Tiffany,
    I enjoyed your perspective of trust is a key element of negotiating. When there are two parties wanting to work together for a mutually beneficial goal, in this case, a successful business, trust is very important. The book has mentioned several times that most investors feel that they are investing in the person and not just the idea. For the negotiation phase to work as smoothly as possible there needs to be some trust. The investor needs to trust that the entrepreneur is not going to throw their money away and that they will honor the agreement of return on the investment if the case of success. The entrepreneur needs to trust the investor that the terms that the investor is offering will be fulfilled. As you state Rome wasn’t built in a day, which means that the investor and entrepreneur should be working on trust from the first meeting until the negotiation phase.

    • Thanks Dustin, it seems that trust is at the foundation of every topic we’ve discussed. I am glad to learn though that in some cases while it is “business” these relationships do have some personal component which makes the deal more than just “business.”

  4. Tiffany,
    Great review! I especially liked the highlight of the point that “the whole idea of negotiation is that both sides be better off after making the deal”. When I came across that line during reading the book it really put things into perspective. I have come to find that the reading helps put into perspective that the business partnership between investor and entrepreneur operates no different than any other relationship. There must be trust and a mutual care concerning the a successful outcome for the business and fellow partner.
    best,
    Shay

  5. You mentioned a point that was very interesting to me…which was that investors often let entrepreneurs make the terms so that it leads to lack of regret and it helps them stick close to what was agreed upon. I think this is a very interesting and really ethical approach to negotiations. I wonder how easy this is in practice for investors. Maybe I care too much about control, but I would be nervous that maybe I would be missing something in negotiations if I just let the entrepreneur go with their terms. I like how the book also highlighted that although some investors take a more passive role, lots of them are much more “invested” if you will in participating in negotiations.

    • In most of the sections we’ve discussed, I definitely felt that these topics were not something that I could approach alone. I would certainly want a team including but not limited to an attorney and a financial advisor to make sure that the deal is equally generous to everyone involved. As I went through the book, I oftentimes imagined myself completing these various parts of the deal and I could never “see” myself alone. I honestly wouldn’t feel comfortable because I am just learning and “know” that I would without a doubt miss something important!

  6. Very nice reflection! You have a ton of great points in about negotiations. A couple of things come to mind after reading your thought. My first thought is that the negotiation phase is where evaluating the entrepreneur and intuition (as covered in previous sections) is crucial to negotiations, as you stated and I couldn’t agree more. I had the same thoughts about negotiating…hire an attorney if this is not your will house. It is better not to be a jack of all trades and a master to none. Business is about finding your niche in so many ways. Negotiating is not for everyone.

  7. I truly love the concept of negotiation leaving both parties better off than before. I sometimes feel that many people don’t see the world that way. So, your comment about not dealing with those people who only want to negotiate with other people’s things hits home.If both parties can’t walk away feeling like they’ve gained something, then something is not right. At the same time, I do feel that there are a limited number of concessions to be had at the negotiation table, at least from the business end. I really like the idea of leveraging other items in the deal, such as how much time an investor will be able to act as a mentor. Those outside the box “perks” are a great way of sweetening the deal for either party.

    • Hi Colby,
      I know that it is probably easier said than done, but I feel that it is plausible to have negotiations that are advantageous to both parties. For me personally, I wouldn’t feel right if the other party felt that they were being outwitted in any way; and, if I happened to be that individual I wouldn’t want to collaborate on any further deals in the future.

  8. Shannon Shepherd says:

    Tiffany,

    I love your opening quote. it is so true. As I have stated before, even if you are afraid do it afraid. The benefits of breaking past your fear far outweigh the struggle. I believe that negotiations should include the interest of all parties involved. You must have the courage to walk away when your interest are not being included. Great Post!
    Best,
    Shannon

    • Nice one! Do it afraid…I haven’t heard that one before but will certainly remember it 🙂 I agree, negotiations should be about finding common ground and not about trying to obtain the upper hand or get over on someone whom you consider to be a partner.

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