Papydo: Why the elbow-​less form of nego­tia­tion makes more sense for start-​ups (and inves­tors) #DHDL

And so, at this point, lions and viewers alike are more than ready to hear the solu­tion of the two young founders who want to finally counter this incred­ible waste of valu­able resources. Because their wrap­ping paper is made of grass, which not only grows back faster, but also requires 90% less water, energy, and CO2 in produc­tion. Never­the­less, even allergy sufferers need not fear wrap­ping gifts with it. The neces­sary acces­sories such as ribbon, tags and even adhe­sive tape are also avail­able in sustain­able versions.

The lions are visibly taken with the idea, a nego­ti­a­tion is already in the air, even before it really gets down to the discus­sion of figures. But here, too, the two power women score points: 80-90% gross margin of their prod­ucts, a price posi­tioning at the upper end of the compe­ti­tion, but still within the range already estab­lished on the market.

The turnover of the start-​up is unfor­tu­nately with­held from us, this impor­tant infor­ma­tion for the eval­u­a­tion of a start-​up unfor­tu­nately fell victim to the cut, but Papydo seemed to have convinced here too, because the often partic­u­larly number-​critical lion Carsten Maschmeyer jumps up enthu­si­as­ti­cally very early on and hands the two a check for the desired invest­ment sum of 100,000 €. He offers them the money for the 12.5% on offer, doesn’t want to nego­tiate at all, he’s that excited.

And while a few more ques­tions are asked, for example about the compe­ti­tion, one already senses that it will not stop there. Carsten Maschmeyer asks Judith Williams if she wants to take part, who soon says yes. Nils Glagau and Ralf Dümmel also have their first exchanges of words.

But anyone who would have thought that a combined offer would lower the valu­a­tion – as is often the case in the cave – at least math­e­mat­i­cally, is in for a surprise: even in a double pack, the finance lion and the beauty entre­pre­neur do not rene­go­tiate, Carsten Maschmeyer and Judith Williams also offer the desired 100,000 euros for 12.5% as a pair. 

The founders accept the offer beaming and grateful, but remain stead­fast even when asked, because they want to listen to all the lions before they make a commit­ment.
You can really learn some­thing from the way they conduct the nego­ti­a­tion here, without letting any kind of nega­tive mood arise. The lions are aware of the compet­i­tive situ­a­tion, and the fact that Nils Glagau and Ralf Dümmel are still hesi­tating with their offer could put the founders under some kind of pres­sure to react, despite their good starting posi­tion.

But they don’t let that happen, even when Judith Williams pushes a little towards the deci­sion because of the hesi­ta­tion of the male duo, they don’t change their atti­tude a bit. But this is neither stub­born nor tactical: friendly, extremely posi­tive and with an emphasis on grat­i­tude for the existing offer, they say they defi­nitely want to be polite enough to listen to everyone, and then actively ask the other lions what they have in mind.

A way of passing the ball that is as clever as it is beau­tiful. Some may now think that they could have empha­sised their good nego­ti­ating posi­tions here in order to get better coun­terof­fers. But what for, all partic­i­pants have under­stood that there is a great invest­ment oppor­tu­nity here. Arti­fi­cially creating a gap that empha­sises this circum­stance would lead nowhere, except to jeop­ar­dise the good mood. This could even provoke the other side to start tactics and to go deeper into the nego­ti­a­tions, because it must assume that this is what it is all about. Why else empha­sise your good posi­tion when it has not only already become clear, but you have also been praised throughout for your great start-​up?

But the founders keep the mood up, not obses­sively, but with posi­tive energy throughout. So, then Dagmar Wöhrl offers exactly the deal they want, while Ralf Dümmel and Nils Glagau want 20%. In fact, you can hear a little that the former is worried about not getting the deal because of the math­e­mat­i­cally worse offer, but both agree that they cannot work with lower percent­ages. So, haggling over percent­ages seems quite futile here anyway.

In the end, the two founders decide in favour of the Maschmeyer/Williams duo, and the percent­ages don’t seem to have been the deciding factor. Besides the added value of the two lions, it was prob­ably above all Carsten Maschmeyer’s enthu­siasm for the topic and the founders that he showed right from the start. Also, some­thing that goes against every tradi­tional rule of nego­ti­a­tion. And that was a good thing.

Because what many fans of patri­ar­chal nego­ti­a­tion methods often over­look: When it comes to valuing a start-​up, two parties are nego­ti­ating here who normally want and need to work with each other for a long time to come. Elbows in the nego­ti­a­tion can there­fore cause lasting damage to the still fresh rela­tion­ship of trust, and thus put long-​term success at risk before they have even really started to work together. Arti­fi­cially creating a gap and haggling over the last few percentage points should there­fore be care­fully consid­ered. Or better yet, leave it alone.