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By Paul Lewis
How do you negotiate the right deal with an investor?
The golden rule in negotiating a deal with an investor is that it should happen quickly. If you find that the negotiation is taking weeks or months, it is never going to happen. You must have a realistic view as to what your company is worth and the deal should stem from there. A very common mistake made by entrepreneurs is they think their business is worth far more than it actually is. Talk to an accountant and look for comparable businesses to understand the true value. When it comes time to negotiate, base the discussions on a realistic valuation and try to make the deal a win-win. If you are not 100% comfortable with the parameters, do not do the deal. If you have the slightest hesitation, move on to another investor and start over. And lastly, if you feel like you got a great deal, then something is horribly wrong.
1. If negotiations take a long time, the deal is not going to happen
2. Have a realistic valuation for your business
3. The deal must be win-win
4. If you think you are getting a great deal, something is horribly wrong
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