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Issue 12: Negotiation Practice

Issue 12: Negotiation Practice

Peter Ahn
February 05, 2025

The Largest Deal in Company History

“100K!!!!!!!!!!!!! I DID IT!!!!!!!!!!!!!!!!!!!!”

I love receiving Slack messages like the one above from founders who put in the work to prepare for critical negotiation calls.

In this particular scenario, one of my clients (Founder & CEO of an AI Analytics Startup) had successfully held the line on a $100K deal (their largest so far) when the procurement lead of a 11K+ employee tech company had asked for a steeper discount (going down to $90K).

This founder had never directly negotiated a six figure contract, so we hopped on a call to strategize and to also practice potential objections that the procurement lead might have.

Some Key Negotiation Tenants

During the strategy session we walked through a few key concepts around negotiation:

1. Never negotiate over email: always push towards a live call where you can read the reaction of the other side and also trade value in realtime

2. At the start of the call, restate the value of your product and the impact: I’ve seen many founders dive straight into negotiation, but when speaking with procurement for the first time, they also need to understand the impact of your product in your own words. Restating the value of your product allows you to elevate the conversation beyond pricing as a reminder that the core of the deal should not be swayed by a specific $$ amount alone.

3. When procurement asks for a counter-discount, resist the urge to guess and suggest a number. Especially if you’ve already provided a discount (which was the case in this deal), the onus should be on procurement to counter when they are the ones asking for further discounts. Otherwise you risk undercutting yourself.

4. Set your “walk away” price: Understand that there may be a price where you need to walk away from the deal. Being confident in this “walk away” price forces you to have a conclusion on the negotiation call. Either the procurement officer gives you a sense for what $$ amount can get the deal done, or you walk away from the deal confirming that price was indeed the deciding factor vs. the value & impact of your product. If both sides do walk away from the deal there were also likely qualification missteps that occurred in the beginning stages of the deal.

The practice and outcome

Once the founder and I reviewed these negotiation pointers, we practiced what the live call could feel like. We went through confident phraseology and I threw negotiation curveballs like, “But you’re just a startup”, “Budgets are tight”, and “We really need this to be at $90K”.

Each of these objections are traps for founders & sellers to deviate from the core discussion around product value but the founder I was working with was able to confidently stick to 1/ The fact that her product was going to make a big impact on the company and 2/ Messaging around current discounts already being favorably negotiated by her executive sponsor.

During the actual real-life call, the procurement lead agreed to maintain the $100K price point and appreciated the founder’s ability to provide further live context around the price point and the value of her AI platform. And while some of the practice session objections did not come-up during the call, she felt calm, prepared, and confident. She wrote, “It feels great to be able to prove to my cofounders that I can do this too…it was invaluable to give me the preparation and therefore the confidence to make it happen.”

Are you negotiating a milestone deal that you need support on? Check out the “Work with Me” section below for resources!

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