N E G O T I A T I O N     E X P E R I E N C E

Alan’s negotiation experience includes:

• Designing, selling & delivering a negotiation course (Single Issue & Multi Issue Bargaining) to corporates such as Openet Telecom and NCB Stockbrokers
• Negotiating a pre-money valuation of €3 million for an 8-month old company that was at least 7 years pre-revenue. This was the first investment into the company and the investor was a major services company in the same sector. The investor got no board seat, no consent powers and neither the investment nor the valuation was tied to achieving any milestones.
• Negotiating with a university, securing an option to buy the IP rights they held for a start-up company, which included all future patents the start-up might develop in a similar field to the original patent. The option allowed the start-up to buy back all the IP rights at any time within 12 months for €25,000. Thus, when it came to raising equity 10 months later, instead of saying “We need to raise €300,000 and we own none of the future or existing IP rights,” the start-up could simply say: “We need to raise €325,000 and we own all the IP rights.” The start-up raised the required equity at a high valuation.
• Negotiating a €5m investment for a company from their favoured global investor for a zero equity stake (almost a grant). The investor was a US industrial company, Number 1 or 2 globally in its field. The investor received some time-limited rights to commercialise future products, but got no board seat, no consent powers and no rights or options to buy any equity in the future.
• Negotiating for his life in a hold-up incident at a brick factory he established in South Africa. The incident, in a room the size of a typical domestic bathroom, involved handing over keys, money & an item of huge sentimental value, and lying face-down on the floor while the robbers fired live ammunition. In Europe, perpetrators rarely shoot in hold-up situations as they know how much it would increase their jail-time if caught. But in South Africa, at the time, it seemed that perpetrators calculated things differently. Only the day before the brick factory hold up, a 75-year-old woman was held up at a petrol station 2-miles from the factory. She returned to her car with the car keys and was asked to hand them over by the robber. He shot her dead, calculating that that this would make the police more likely to come to the woman’s aid than to chase him.
• Negotiating a carve-out of IP rights for a start-up company from one of the world’s largest food multinationals. This was achieved incurring legal costs of less than €1,000.
• Securing world class legal advice for a start-up over the first 8 years of its life for a cash cost of zero. The lawyers involved agreed to add up the value of their services once a year and take a slice of equity as payment. It should be noted that the amount owed to the lawyers was relatively low. The total bill over 8 years, covering 7 funding rounds, two joint venture agreements with multinationals, multiple grant awards, a potential litigation situation, the establishment of related companies, HR situations and other sundry issues came to less than €200,000. (The low cost was partly due to the fact that Alan did much of the standard legal work himself, getting sign-off from the lawyers on all crucial documents. In the 2 years after Alan’s day-to-day involvement with the company ceased, the company spent over €800,000 on lawyers, during which time one funding round was completed, no new markets were entered, no significant HR problems arose and no new companies were established.) Note: all the legal advice referred to here excludes IP and patents – which was delivered by another specialist legal company.
• Negotiating an investment – while being hugely outnumbered – in a high tech waste disposal business (we’ll call it “WDB”). When Alan arrived to negotiate the final details of the investment he found himself unexpectedly in a room with four other parties (WBD’s owners, WBD’s lawyers, representatives for WBD’s employees, and another company with a claim on WBD’s IP rights. These parties had spent the previous 48 hours hammering out a deal which would come into effect after Alan’s company made its investment. However, Alan was not prepared to invest if the deal stood because it violated the basis on which he’d agreed to invest. The other 4 parties, having gone without much sleep for the last 48 hours, and having negotiated their deal without much if any thought for how Alan might react, were in no mood to change their agreement and accused Alan of reneging on an investment he’d promised to make. While they were being irrational (any independent examination of the documents signed till then would evidence that Alan was merely refusing to alter the terms he’d previously agreed to), it was a real-life situation where telling people they are being irrational will not work. The deal couldn’t be done without the party Alan represented, so Alan just refused to buckle despite all the pressure and being the minority in the room. Since the bullying route didn’t work, the other parties had to come to the table and find another way. A deal acceptable to all was negotiated over the following 36 hours and the investment was made.
• Alan has also witnessed instances of terrible negotiating, which themselves are instructive. Examples include: (1) A company that accepted major investment after years of product development while actively avoiding the creation of any competitive tension in the process & without making any effort to showcase the company’s assets. This resulted in a valuation tens of millions of euro less than could otherwise have been achieved. (2) A company that agreed a commercial arrangement with a major partner which included a clause that effectively reduced the company’s valuation by over 50% (This was missed by the company’s management, board, investors, lawyers & advisers; Alan pointed it out after he got involved with the company some time after the arrangement was concluded). (3) An individual on a salary of c.€120,000 p.a. who refused a deal that would have seen him receive an upfront payment of over €500,000 in return for giving up a very questionable legal claim he had over a company. He refused the offer, hoping to pressurise the company for more and ended up with nothing.