Steps to Growth Capital Investor Readiness Skills

3.1 Improve Your Negotiation Skills: Introduction

Do you have what it takes to be a successful negotiator? During negotiations the investor will be looking for certain rates of return, exit strategies and other conditions based on how he or she values the potential of your opportunity. At the same time, you'll be looking for certain terms and conditions that you need to maintain control of your business.

Because you and the investor will have different points of view, skirmishes are likely to occur during negotiations. But if you deal effectively with these differences you can influence the results of the negotiation to get what you want and reach an agreement that's mutually beneficial to you and the investor.

There are a number of outcomes that could occur as a result of negotiations. Depending on how you address the negotiations, you will reach one of the following outcomes.

Win-Win.

Both parties achieve their goals and are satisfied with the outcome. For example, both you and the investor are happy with the terms of the negotiation contract.

 

Win-Lose.

One party achieves the goal at the expense of the other party. For example, the investor is happy with the terms of the contract, but you believe the investor will have too much control of your business.

 

Lose-Lose.

Both parties are dissatisfied with the terms of the negotiated contract. For example, you feel that the investor is demanding too high a return, and the investor feels that your valuation of your goodwill is exaggerated. The two of you cannot agree on these points, but they are the only items that are preventing you from signing the deal, so you leave them in and close the deal.

As you want to build a long, prosperous relationship with the investor, you should aim for a win-win agreement so that both parties feel that their needs have been met.

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