Valuation and Negotiation
I was thinking about Rob Go’s post on valuation which makes one of those great points that fit in the category of common sense that people in my end of the business often feel intuitively but don’t articulate. With respect to the valuation of early stage VC investments (where there is no cash flow), he says: The answer is that vc rounds are priced by the market - by supply and demand. I once met an experienced VC who admitted to me that he didn’t actually know how to do a DCF. But he did know where a deal would likely close...
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Negotiating and dealing with bullies
Bullying is not often seen in negotiation. I think this is because in many negotiations, the parties need to be able to work together after the negotiation is complete, and bullying just leaves a very bad taste in the mouth of the person who was bullied. Having said that, some negotiators take that tack and it can be hard to deal with if you really want the deal for some reason. The bully is, in effect, counting on your unwillingness to break up the deal to push you into all kinds of concessions....
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Negotiating and a good reason
Negotiation can be about a lot of things. A great attorney that I know, he is now retired, once said that the most difficult thing to overcome in a negotiation is a good reason for something. A good reason – one that can be articulated so that the other side recognizes it as self-evidently rational – will often (very often) trump the power, the money and the clever posturing....
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