MattCope

MattCope

23p

21 comments posted · 2 followers · following 3

581 weeks ago @ Highway 12 Ventures - So What Is Your Start-... · 0 replies · +1 points

Well, I suspect that sometimes, you negotiate on the basis of interests, but you might not refer to it as such.

Maybe a good example would be an equity vesting timeline for key hires.

Using a positional tactic, you would offer a 5-year schedule, knowing you would concede a 3-year schedule. The other side might offer a 1-year schedule, expecting to settle on a 3-year schedule. But that's time-consuming, and once you've dug yourself into a position, it's psychologically difficult to make a concession.

The underlying interest here is attracting the best talent possible - and it's one that's shared by both parties. So a better way to attack the problem would be by having both parties invent solutions to help address this interest - maybe it's employee benefits, or a larger cash budget for salaries, etc.

Maybe this framework doesn't suit the actual valuation of a start-up, but as you know, there's lots more things that go into a VC investment than the valuation.

And again, I suspect this process is something you do all the time, but don't refer to it in terms of "interests" vs. "positions".

If you have the time and inclination, check it out on Google Books: http://bit.ly/b5cJcc
Start at page 3, and if you feel like it doesn't apply to the VC world after 5 pages, feel free to put it down.

581 weeks ago @ Highway 12 Ventures - So What Is Your Start-... · 2 replies · +1 points

Well, the classic example is two people fighting over an orange.

Their positions are clear - both want the orange. An example of a resolution to this conflict (where both are equally dissatisfied) results in cutting the orange in half.

But neither articulated their interests. While one wanted to eat the fruit, the other wanted to use the peel to bake a cake.

Had they framed their negotiation in terms of their interests rather than their positions, the net benefit to both would have been greater.

A real-world example is the resolution of Israel's occupation of the Sinai after 1973. The position of each party: "It's mine." But Israel's interest was security, and Egypt's interest was sovereignty over historically Egyptian land. An agreement that returned a demilitarized Sinai to Egypt met both parties' interests.

So, I'm wondering if there's any application of this framework to venture investing. Maybe there's not. But the phrase "equally dissatisfied" - in the context of my rereading of Getting to Yes - got the gears turning.

582 weeks ago @ Highway 12 Ventures - So What Is Your Start-... · 4 replies · +1 points

Who are you fooling? If it's a good idea, you invest $1mm at a $5mm valuation then go play golf!

Kidding, of course. : )

I've been re-reading Getting to Yes recently. One of the major lessons is to negotiate in terms of interests (I'd like to avoid red lights, even if the trip is longer) versus positions (Let's take the highway).

I wonder, are there opportunities to negotiate on the basis of interests, rather than positions, in the VC investment process? It seems like, more often than not, the negotiations are positional ("Your company is worth $10mm." "No, it's worth $20mm." "Ok, let's call it $15mm.")

Any thoughts?

583 weeks ago @ Highway 12 Ventures - Our New Entrenpreneur-... · 0 replies · +1 points

Nice - congrats, Jason!

593 weeks ago @ Highway 12 Ventures - Our American Treasure · 0 replies · +1 points

Phil,
Sounds like the thrill of a lifetime.
God bless America.
Matt

598 weeks ago @ Highway 12 Ventures - A Difficult Decision F... · 0 replies · +1 points

Mark - good use of the library for this post.

How often do founders hold the reigns too long because of psyche - e.g., "This company is my baby" ?

And to what extent do you think carving out a 'Founder' role, separate from the CEO role, helps manage this?

601 weeks ago @ Highway 12 Ventures - Legal Documentation Fo... · 1 reply · +1 points

Great piece.

I remember the flurry of blog posts and uploaded "lite" documentation a few months ago. Sitting on the entrepreneurs' side of the table, it all sounded great.

But I didn't consider the Forgotten Man in the discussion - the institutional investor, who may sometimes need a little more assurance than a lite doc can provide...

608 weeks ago @ Feld Thoughts - Three Entrepreneurial ... · 2 replies · +1 points

Yes!
I saw the post title and thought, "Atlas Shrugged better be up there..."
And, Lo!

Now.....about the Feld bar.....who made it? Had any feedback? Plans to roll it out further?

608 weeks ago @ Highway 12 Ventures - Why I took the job ins... · 1 reply · +1 points

Wow. This is an extremely thoughtful post, Tac - thanks for sharing it.

Whether this path is "better" or "worse" than the alternatives, I think you can take pride in your decision-making process. At the end of the day, that's the variable you have the most control over.

612 weeks ago @ Highway 12 Ventures - Moose Crossing? · 0 replies · +1 points

LOL! I wish I had a vote.