ACA Session – Negotiate Now or Pay Later

April 16 2009 No Commented

Robert Robinson, founder of the Hawaii Angels, gave a session on negotiating at the recent ACA Summit.

The following are some brief notes from his session:

-Angels need to negotiate in the following areas-
Expectations
Process
Term sheet
Communications
Portfolio Governance
Follow on Financing
Exit

-Your negotiating strength is proportional to the value of your alternatives AND inversely proportional to the value of their alternatives.

-“Principles unite and numbers divide.” Don’t talk numbers in the early stages. Talk about the vision for the company over the next year and beyond or related topics. Once you start talking valuation you are in adversarial position from then going forward.

-Many times entrepreneurs get too concerned about getting too diluted. However, dilution is not the worst thing that can happen to entrepreneur. The most proximate cause of company death is running out of cash.

Read the original article here.