Everything is negotiable
#CapitalAtRisk
What came first?
I’ve found that founders aren’t the best negotiators. Not that I’m always a pro, but it’s incredibly rare for a founder to push back on the terms of anything. And not just investment — there are lots of moving parts to most deals and a lot of startup success is buying well as well as selling well. The thing is, everything is negotiable so it’s good to think about those moving parts and rank their importance, to you and your counterparty. What are the incentives here and which levers can you pull?
Do you think Monzo accepted the same deal as everyone else when they raised almost £20m through CrowdCube? I remember seeing piles and piles of iPhones in Uber’s scruffy London office in 2012 — do you think they got the same deal as you and me? It’s not just the big established startups that negotiate well — my photocopier-salesman-mate Justin haggles over absolutely everything (as I’ve discovered to my cost). He just can’t function without thinking that way.
It’s easy to think, “Oh, they got a better deal because they’re Monzo”. But maybe they’re Monzo because…
Important: None of these posts are investment advice. If you are thinking about investing you should seek the advice of a suitably qualified independent advisor.