We asked two of our 886 partners this question:
Can you provide any insights or personal experiences in negotiating with potential lead investors?
Kevin Chou — Co-Founder of Kabam
Understand the key leverage points in your negotiations. The 4 key leverage points will always be: A) is the funding market in a bull or bear stance? B) Is your market segment bullish (e.g. AI last year, web3 in 2021)? C) is your business growing revenues quickly? D) Do you have another term sheet? If all 4 of these leverage points are in your favor, you have all the leverage in negotiating with the lead investor. As you lose leverage points, you will find that you lose more and more favorable terms.
Jameson Hsu — Co-Founder of Mochi Media
Usually only companies with something unique and desirable have room to negotiate. Figure out what makes your company special and use that to get your deal closed quickly. As entrepreneurs pitch their companies they will quickly learn what resonates with investors and what doesn't. Use that knowledge to amplify the things that resonate with investors to get the best terms possible.