WWYD Like –Commentary:
Your first offer should reflect your personality and attitude towards the deal. You want to make sure your first ask is high enough so that if you get it, it won’t be disappointing.
It’s important to set the measurement, currency or metric for the variables you choose. You know that price = money — but how do you work with Quality, creativity, leadership, connections, or best efforts? Negotiators are always looking for ways of measuring performance and compliance. You invested col hard cash in a production line, and now they can’t seem to figure out how to get the process right — but they are working on it 12 hours a day.
Al’s variables include
1. 50% ownership stake, equal decision-making authority
2. Guarantee of salary package including severance package equal to 6 months gross compensation.
3. Minimal investment, easy exit.
His L looked like this:
V1: 50% equity stake with equal decision-making authority on all matters.
V2: $150,000 salary + highest level of healthcare for his entire family
V3: Until the partners decide otherwise, all start-up expenses would be paid in on an as-needed basis.
Bob’s variables where
1. Control and solo decision-making authority across the board.
2. Each partner contributes $50,000 immediately, and undertakes to provide seed funding of $100,000 within 8 weeks of incorporating.
3. Airtight NDAs, non-competes, and other entanglements.
Bob’s L initially looked this:
V1. I am President and CEO
V2. $150,000 contribution.
V3. Any work done under the employ of the new company would be property of the company. No exceptions.
These L positions seem pretty far apart — but that’s OK.