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Negotiating better with venture capital firms

by | Jan 5, 2022 | Business Formation

Venture capital firms in New York take on a considerable amount of risk. Learning how to negotiate with investors is the key to securing the funds.

Listen and wait for responses

Learn to listen and wait for the right response. After you present each major point, see if the investor will make an offer, and be prepared to clarify your points.

Summarize the main ideas

Make sure that everyone is on the same path. Summarize the main ideas and topics that were discussed during the meeting. The summary is the time to ask a few more questions and readdress difficult issues.

Prove your business knowledge

Investors are impressed with clients who show their advanced knowledge of finances, management and business law. They are more willing to work with people who understand the legal consequences of not repaying their debts. This is especially true when working with young, startup entrepreneurs who want to work in risky industries.

Make follow-up contact

Following up with an investor prevents miscommunications that diminish your interest in a project. Avoid making too many follow-up questions, and focus on making bold statements that further prove your interest. Overall, following up helps to build trust between you and senior members of the firm. A client is encouraged to build a long-lasting partnership with an investor.

Improving your negotiating skills

In the end, you want an investor to work for your best interests and become a reliable partner. Let the company know as much about you as you know about them. When you’re starting a business, you’re getting into a high-risk venture and need to reassure the venture capital firm of your reliability.