The Negotiation Process

The negotiation process, as the first step in an equity financing round, calls for a collaborative approach. Here are some best practices during the negotiation process between founders and investors.

1.Preparation and Research
Both parties must come to the table prepared. The founders should research comparative valuations; understand what the investor is looking for; and have a clear vision of the kind of capital needed and how it's going to be deployed. Investors must, on the other hand, carefully study the business model, growth prospects, and risks of the company.