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Aria Ventures

10 Techniques for Better Negotiation

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Here are ten tactics that can make you a better, more confident negotiator on behalf of your small business.Here are ten tactics that can make you a better, more confident negotiator on behalf of your small business.

Ten negotiation techniques:

  1. Prepare, prepare, prepare. Enter a negotiation without proper preparation and you’ve already lost. Start with yourself. Make sure you are clear on what you really want out of the arrangement. Research the other side to better understand their needs, as well as their strengths and weaknesses. Enlist help from experts, such as an accountant, attorney or tech guru.
  2. Pay attention to timing. Timing is important in any negotiation. Sure, you must know what to ask for, but also be sensitive to when you ask for it. There are times to press ahead, and times to wait. When you are looking your best is the time to press for what you want. But beware of pushing too hard and poisoning any long-term relationship.
  3. Leave behind your ego. The best negotiators either don’t care or don’t show they care about who gets credit for a successful deal. Their talent is in making the other side feel like the final agreement was all their idea.
  4. Ramp up your listening skills. The best negotiators are often quiet listeners who patiently let others have the floor while they make their case. They never interrupt. Encourage the other side to talk first. That helps set up one of negotiation’s oldest maxims: whoever mentions numbers first, loses. While that’s not always true, it’s generally better to sit tight and let the other side go first. Even if they don’t mention numbers, it gives you a chance to ask what they are thinking.
  5. If you don’t ask, you don’t get. Another tenet of negotiating is, “Go high, or go home.” As part of your preparation, define your highest justifiable price. As long as you can argue convincingly, don’t be afraid to aim high. But no ultimatums, please. Take-it-or-leave-it offers are usually out of place.
  6. Anticipate compromise. You should expect to make concessions and plan what they might be. Of course, the other side is thinking the same, so never take their first offer. Even if it’s better than you’d hoped for, practice your best look of disappointment and politely decline. You never know what else you can get.
  7. Offer and expect commitment. The glue that keeps deals from unraveling is an unshakable commitment to deliver. You should offer this comfort level to others. Likewise, avoid deals where the other side does not demonstrate commitment.
  8. Don’t absorb their problems. In most negotiations, you will hear all of the other side’s problems and reasons they can’t give you what you want. They want their problems to become yours, but don’t let them. Instead, deal with each as they come up and try to solve them. If their “budget” is too low, for example, maybe there are other places that money could come from.
  9. Stick to your principles. As an individual and a business owner, you likely have a set of guiding principles and values that you just won’t compromise. If you find negotiations crossing those boundaries, it might be a deal you can live without.
  10. Close with confirmation. At the close of any meeting (even if no final deal is struck) recap the points covered and any areas of agreement. Make sure everyone confirms. Follow-up with appropriate letters or emails. Do not leave behind loose ends.

Venture Capital: 5 Tips to Get Funding Outside Silicon Valley

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1. Network locally

Use your local network to connect with venture capital firms in your city. Have you stayed in touch with past coworkers? Do you have connections with any angel investors (many of whom are well connected to the venture capital scene)? Can your business banker point you in the right direction? Those coffee gatherings and meetups you haven’t been going to are how you get noticed, so get active and start getting your name out there.

In Silicon Valley it can seem that everybody knows everybody, so you may not have to work as hard for a meeting. Outside the Valley, though, this is often not the case. Anybody who can introduce you to a venture capitalist therefore is somebody you need to get in touch with. So network like crazy.

2. Start with investment-friendly cities

Even if you decide you aren’t going to search Silicon Valley for venture capital, you still need to have a high level of focus.

Over the past few years, many cities, both small and large, have seen an increase in the number of venture capital firms as well as the amount of money being invested. Some of the most popular up-and-coming cities include: Albuquerque, Pittsburgh, Seattle, and Los Angeles. Who would have thought that some of these cities would turn into a hotbed of venture capital funding? If possible, start with cities where investing in entrepreneurial companies is already common.

3. Focus on cities that cater to your specific type of business

In New York, fashion, art, and banking are the industries in the forefront. In Washington DC, government and defense-related companies have the best chance of success.

Don’t jump from city to city without any idea of what you are looking for. Instead, focus on those that are known for being receptive to your particular industry.

4. Be informed

Learn as much as possible about the venture capital firms in the cities you are targeting. Remember, you are no longer in Silicon Valley. You don’t have access to nearly as many firms. To give yourself the best chance of success, you should learn as much as you can about every firm (see point number one above) and then pinpoint how their goals align with what your company has to offer.

There are many details to focus on during this process including:

  • The types of companies the firm has invested in previously
  • The location of these companies (local, national, or both)
  • The amount of money that has been invested

Also, it’s important that you select an investor that’s a cultural fit. If your startup has a casual and laid back atmosphere, there’s no point seeking an investment from a VC who’s used to dealing with more traditionally structured businesses. What a VC believes in is just as important as the size of their investment.

5. Research your situation

Know what type of funding you need, as well as which investors fit the bill. In Silicon Valley, for example, Seed and Series A investors are generally located in the Pier 38 area; Series B and C can be found in Palo Alto/Menlo Park; and for investment banking you head into the city.

Unfortunately, things are not as cut and dry in other parts of the country. This does not make it impossible to find the right type of funding, but you need to know what you are looking for. If you are working on a startup, you don’t want to get in touch with firms that only offer Series C funding – this is a waste of time.

So be sure to do your homework, know which type of funding you are seeking, and then go out and find the right Venture Capital source to fuel your growth. It may seem like a lot of work, but it will be worth it in the end.

3 Criteria for Starting a Business from Norm Brodsky

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It’s not always easy figuring out what kind of business to start up, especially if you hear all the doom and gloom stats about how many businesses fail shortly after hanging the “open for business” sign. For some perspective on how to choose a business that has legs, we spent an hour with Norm Brodsky on StartupNation Radio. He’s a columnist for Inc. Magazine, and founder of several multi-million-dollar ventures that are worth bragging about.

Norm offers his wisdom on 3 criteria you should consider before starting a business.

1. The business concept needs to be well established

According to Norm, the first criterion for starting a business is that the business concept needs to be well established. “At least 100 years old,” says Norm. “You don’t want to spend a lot of money educating people about how to use your business. It’s to your advantage that people know that the business concept exists, how to use it, and where to find it.”

Example – Norm and his wife were in Paris one day and walked by an area that sold nothing but cashmere sweaters. She said that the area would be a terrible place to open up a new shop (selling cashmere), but he thought that it would be perfect. As Norm sees it, if someone is looking to buy a cashmere sweater, that’s the block they’d go to. He wants to be located where everyone will already be looking for that kind of product or service.

2. Industry standard needs to be antiquated

The second criterion is that the industry standard needs to be antiquated. By that Norm means that the business concept exists and is in practice, but improvements can be made using technology and improving service.

Example – In the record storage business, prior to Norm’s venture into the industry, the standard was for things just to be packed up and moved. But Norm made some improvements. He used basic technology to provide customers a receipt for their items on the spot. This customer service feature, which only required some basic modern technology gave him an advantage over his competitors who weren’t yet providing this simple convenience. That put Norm’s CitiStorage at the forefront—creating a new industry standard.

3. Finding a niche to fill within the industry itself

The third criterion is finding a niche to fill within the industry itself. Just by really digging in and understanding an industry, you can often uncover certain angles that are not being covered. Find a new twist on service, a new twist on marketing, a new mix of products or customer-friendly policies. Somewhere, there’s an angle—and often times old-guard companies that have been in the business for a long time get lazy and used to “business as usual.” That’s your opportunity if you’re looking at starting a business.

Example – Everybody loves Starbucks for their coffee. They’re a progressive company that serves coffee in more ways than you can count. They provide an excellent product, and great service. They have almost every angle covered, except for 24 hour service at most locations. College kids (and the writing staff from StartupNation), for example, love to “pull all nighters” at their local coffee shop. Some of Starbucks’ competitors have taken advantage of this “niche within the business.”

Whatever your skills, whatever your ambition, just remember that the best businesses to choose are sometimes simple variations of businesses that have been around a long time. Norm’s tips, we think, are spot on—reinventing the wheel is for high-risk ventures and big budgets. If you want a less risky path when starting a business, consider simply providing a much better wheel and get your business startup rolling!