Looking for an investment from a CVC? Take these 3 tips to the negotiation table

Published by
Peter Kavinsky

As venture capital flows continue to fluctuate, founders have to double down on the terms they agree on. While it can be tempting to overlook certain terms for the sake of closing a deal, founders should remember that nearly everything in a deal is negotiable.

A lot of entrepreneurs tend to focus only on the company’s valuation during talks, but often, other clauses in the contract can be far more impactful. The problem is that founders in the early stages of their business often don’t want to hire lawyers because of the cost involved, so they don’t have the legal knowledge or experience to negotiate the best possible deal.

But when you’re dealing with corporate venture capital (CVC), where firms have seasoned, dedicated legal teams, founders need to enter negotiations with an understanding of the legal dynamics. Doing so will enable them to be creative with their requests and implement more effective terms for both sides.

Drawing from my legal expertise as head of Wayra X, Telefónica’s investment vehicle and conversations with founders at the negotiation table, this is my advice for dealing with CVCs.

CVCs understand startup negotiations, too

Especially at the moment, you should feel that you can still challenge investors’ terms and express your preferences.

It may seem like you’re facing off against Goliath when trying to negotiate with CVCs, but the size and experience of their legal teams doesn’t give them an automatic advantage. Yes, CVCs are more used to preparing M&A and high-level contracts, but they should be able to change how they think when working with startups.

That means being able to work efficiently with a smaller team, write contracts in plain language and clearly break down requirements before anything is signed.

CVCs also shouldn’t go against the grain of the wider investment world; their size doesn’t allow them to operate outside of standard processes. So, if they present terms that would seem out of place in a traditional investor contract, founders can definitely call them out. Likewise, if a CVC wants to link the investment through a commercial deal, you can refuse, especially if there’s a possible conflict of interest.

Source: TechCrunch

Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

Share
Published by
Peter Kavinsky

Recent Posts

  • News

Maxi fire in Pantelleria. Evacuate the homes of celebrities including Armani and Tardelli. Musumeci: Malevolent Origin

Listen to the audio version of the article The fire broke out in Pantelleria in…

4 mins ago
  • News

Enemy kills 3 civilians in Donetsk region in 24 hours

In the Donetsk region, the Russian army killed three civilians and wounded six on August…

5 mins ago
  • News

Kidnapped: Who did ELN free recently? | Judicial

In the last hours ELN western front of the war released for Jovan David Rudas,…

11 mins ago
  • News

All Boys in Pairs: The Loneliest in the U.S. Are Straight Men

The loneliest in the United States are just such young and middle-aged men.A picture: Evgeniya…

12 mins ago
  • News

The power of Marte and Lindor raises the Metro in their duel against the Brave | Sports social networks

Dominican outfielder Starling Marte hit two homers and Puerto Rican Francisco Lindor hit a homer…

13 mins ago
  • News

On this day in 2013: Europe wins Soheim Cup on American soil for the first time

Europe won the Soheim Cup on American soil for the first time, beating the United…

14 mins ago