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First learn to say NO. Now you’re ready to negotiate. Most entrepreneurs approach the issue of negotiating with great stress and anxiety. This leads directly to weak negotiations or becoming defensive about being asked too many questions. Either way, you lose! In order to avoid this happening to you, please go back to chapter eight "Terms" and make sure you have clearly defined what you are looking for before the negotiations begin. Then . . .

  • Determine which points are worth fighting for.
  • Express your objections and questions to any point.
  • Get it in writing, leave nothing to verbal agreements.
  • Subject everything to your long range goals.
  • Pay close attention to what triggers default.
  • Establish ceilings and caps. You don’t want to be stuck paying huge payments if rates go up.
  • Plan for the downside. Attempt to have an "interest only" clause or "skip payment" provision in the event of slow downs.
  • Look for a no pre-payment penalty or the right to buy back your stock at a fixed price.
  • Pay attention to covenants, conditions, ratios, restrictions or other clauses which can have serious long term effects.
  • Try to minimize pledging collateral. You may need those assets in the future to raise additional capital.
  • Seek professional counsel before you sign anything. Lawyers and accountants may not help you fund your deal, but they can help you spot the small details that may burden you down the road.

Close
Remember you are out there selling yourself and your company. The answer is always NO if you don’t ask the question so be a closer!

It is important than you not only know and believe in your plan but that you be able to articulation your ideas to others and that you have done the research to support your assumptions.

A skilled presentation will go a long way towards earning you the capital you desire. Make sure you practice your pitch on everyone who will listen before you pitch it the first time to investors or lenders.

For more on developing your 30 second elevator pitch and your 10 minute closing, get my book "The art and science of obtaining venture (or investment) capital". It details what must be in your pitch and close, how to have doors opened for you, and what mistakes not to make once you are inside. It is available at www.businessfinance.com


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