Analysis of the Business Negotiation

The paper would focus on and analyze a negotiation scenario that happened between me (an Entrepreneur) and a group of Venture Capitalists. The entrepreneur has a sound concept for initiating a model new business however doesn’t have sufficient capital to let it begin, so he approached a bunch of enterprise capitalists to present them with the plan, build their interest, and obtain adequate amount of funding funds for the business.

There are a few issues between them over which they’re negotiating – the settlement of amount of investment, its interest rate, and cost technique and time.

And second problem is the conditions that are set by the enterprise capitalists concerning the sort and operations of the business for the entrepreneur over which he must act on so as to have funds available. These issues took a lot of time for negotiation; nonetheless it was profitable as a end result of both parties agreed on win-win circumstances.

Analysis of the Negotiation

Of course it was not expected by the entrepreneur that such situations can be set by the enterprise capitalists which may compel him to stroll away with out undertaking his objective.

Moreover, enterprise capitalists additionally wished to see ‘what’s in it there for them’ that might profit them when it comes to financial worth, model picture, increased gross sales, and recognition. The negotiation’s success is analyzed within the mild of ‘6 Habits of Merely Effective Negotiators’ that would understand the reasons it received successful for each the events.

Both of the events didn’t make the error of neglecting every other’s issues and desires, which enabled them to place themselves in other party’s footwear and think from their perspective too.

The entrepreneur did perceive that enterprise capitalists do require larger return over funding, want business to operate in new rising markets somewhat than developed ones, seize more market share, customers, and earnings. Whereas, venture capitalists did understand that the entrepreneur has a sound enterprise idea and is determined to implement it that would additionally profit the community.

Venture capitalists agreed to pay rather more than the amount the entrepreneur was asking for investment, as a result of they did not need him to bear low value and better costs. Moreover, the entrepreneur also thought-about the social contract, social norms of conducting business, and didn’t let the relationship with the investors turn towards a negative direction The position of the entrepreneur was to obtain round $150,000 while making no adjustments in the kind, operations, and locality of the business (that were his interests).

But depending on the situation and conditions put by the enterprise capitalists, he needed to sacrifice his pursuits however they have been being compensated in other methods. As far as widespread grounds are involved, both parties realized that there can’t be such a common floor that advantages both the events at its best; nonetheless, the sacrifice of pursuits was not that a lot since both the events are interdependent and therefore would seek a win-win situation.

Walking away from the situation for both the events was quite difficult, since entrepreneur was very keen to begin the business by some means and the venture capitalists did see an excellent potential and worthwhile ends in the enterprise concept. And lastly, both the events kept themselves from a mistake referred to as ‘Partisan perceptions’ the place one celebration depicts itself as full of good qualities and defame the opposite party (Sebenius, 2001). This inspired pleasant ambiance that ultimately led to the finalization of deal on agreed phrases between both the events.

Therefore, when negotiating with some other get together in the future, I would think about its problem or situation, would at all times discount for my own stake and as properly as think about his profit, understanding the extent of cut price that may be carried out, would not let the place have an effect on the pursuits, and would like BATNA if a sound negotiation could not be done.

References

Sebenius. J. K. (2001). Six Habits of Merely Effective Negotiators. Harvard Business Review. April 2001.