by Vanessa Youshaei
So much of life comes down to talking to others and convincing them to see things your way, but this is especially true for successful start-up founders. Whether you’re hiring employees, raising money, or onboarding strategic partners, negotiation is always at play. This is even more true at the beginning when you don’t usually have the funds to pay for things or the traction to easily convince people of your vision. Can’t afford an employee? You’ll have to convince him or her to join for equity. Need money to get things going? You’ll have to convince investors of your vision. Need a critical business partner but don’t have any customers? You’ll have to convince them of how your company stands out from the rest.
So what’s the secret to doing this effectively? How do you get busy, talented people to pay attention to you especially when you’re just starting out?
People are always more interested if they know others are interested. Selene Cruz, the founder of Re:store, raised her seed round by meeting with 60 investors and implementing this exact strategy. She let lukewarm investors know that they would need to make a decision quickly otherwise she would pass the opportunity to other interested investors. This allowed her to raise $1M in two weeks.
Make sure you’re talking with the decision maker – at the right time
When negotiating, knowledge is king; the more information you have, the more likely you are to achieve your desired outcome. Instead of talking with the decision maker right away, start by talking with junior level employees to gather as much information as possible to build your case. For example, try and understand the priorities and objectives of the senior leadership team. Once you have that information, you’re in a much stronger position to create a pitch that will captivate the decision maker. More often than not, it’s hard to re-pitch decision makers once they’ve made up their mind, so make sure you’re ready when the time comes.
Let them know what’s in it for them
Always emphasize what’s in it for them (not you) and what they’ll be missing out on if they don’t make the deal with you. This process always begins with understanding their goals and then aligning your message and offerings accordingly. When I was first building partnerships with the large brands on our site, I let them know that at the very least, they’d be receiving free brand exposure and introducing themselves to a market that wouldn’t normally think to buy from them. The best part? They had absolutely nothing to lose.
When you’re trying to close a deal, you’re likely very excited and probably a little nervous. Keep in mind that the people you’re talking with are probably seasoned professionals who have been around the block a few times. If you come across as overly eager, you also seem desperate which gives people a reason to question the opportunity. Approach the conversation confidently and in a way that lets the other party know they’ll be sorry if they walk away.
Leverage Past Accomplishments to Build Credibility
Establishing yourself as an authority from the getgo gives you more credibility and ultimately more bargaining power. Often the best way to do this as a start-up founder is by leveraging your past accomplishments. As someone who is building a fashion start-up, I was always wary that people would question my credibility because I didn’t come from the fashion world. Even though I wasn’t an expert in clothing and fashion, I had previously worked at Google in sales and marketing, two areas that are critical to building any company. Whenever I met with someone for the first time, I made sure to start the conversation with my professional background which helped build automatic rapport and gave me a lot more leverage in our conversations.
Have other tactics you’d recommend or need help with a deal you’re putting together? Comment below to get the conversation started.
Vanessa Youshaei is the founder and CEO of Petite Ave, a one-stop shopping destination for women under 5’5’’. They currently have partnerships with 20+ national brands including Ann Taylor, Bloomingdale’s, and Express with many others joining later this year. In addition to making the shopping experience more convenient for petite women, they hope to become a champion for the petite community and help shorter women achieve greater representation in the fashion industry. Prior to Petite Ave, Vanessa spent 3.5 years at Google working in sales, marketing, and program management. She’s a graduate of Emory University with majors in marketing and finance.