I was recently speaking with one of our founders. We were talking about his company’s fundraising strategy when he said that he approaches each fundraising discussion assuming he already has $100 million in the bank.
Fundraising negotiations are driven partly by reason and partly by emotions. Being relaxed and confident inspires positive emotions in your counterpart so it’s important to feel this way during the discussion. If your counterpart senses that your startup’s future is reliant on their funding decision, this may cause them to walk away or try to take advantage of your weakness. Approaching the discussion thinking you have $100 million in the bank is a good way to prevent this from happening.
This doesn’t mean that you need to lie. Our founder doesn’t actually say that he has $100 million in the bank. He simply acts like it. And this makes him more relaxed and confident during the discussion, improving the odds that he achieves a better outcome.
You can apply a similar strategy in other areas where you need to negotiate. In the context of startups, examples include hiring and establishing partnerships. Whatever it is that you want, assume you already have a lot of it before entering the negotiation. You’ll be much more likely to get what you want.