Looking for an investment of an HVAC? Bring these 3 tips to the negotiation table

Luisa Rubio Arribas Contributor

Luisa Rubio Arribas leads Wayra X, Telefónica's digital innovation hub that provides funding, connections and expertise to B2C startups ready for the mass market.

More posts from this contributor The Return of the Corporate Venture: What Startups Considering HVAC Need to Know

As ​​venture capital flows continue to fluctuate, founders must double down on the terms they agreed to. While it can be tempting to overlook certain terms in an effort to close a deal, founders should remember that almost everything in a deal is negotiable.

Many contractors tend to focus only on evaluating the business during discussions, but often other clauses in the contract can have much more impact. The problem is that founders early in their business often don't want to hire lawyers because of the costs involved, so they don't have the legal knowledge or experience to negotiate the best possible deal.

But when it comes to corporate venture capital (CVC), where companies have experienced and dedicated legal teams, founders need to enter negotiations by understanding the legal dynamics. This will allow them to be creative with their requests and implement more effective terms for both parties.

Leveraging my legal expertise as head of Wayra X, Telefónica's investment vehicle, and conversations with founders at the negotiating table, here is my advice for dealing with CVCs.

Particularly at this time, you should feel that you can still challenge investors' terms and voice your preferences.

It may seem like you're up against Goliath when trying to negotiate with CVCs, but the size and experience of their legal teams doesn't automatically give them an advantage. Yes, CVCs are more used to preparing M&As and high profile deals, but they should be able to change their thinking when working with startups.

That means being able to work effectively with a small team, writing contracts in plain language, and clearly detailing requirements before anything is signed.

CCVs should also not be at odds with the wider investment world; their size does not allow them to operate outside standard processes. So if they come up with terms that would seem out of place in a traditional investor contract, founders can definitely call them out. Likewise, if a CVC wishes to tie the investment through a commercial agreement, you can decline, especially if there is a potential conflict of interest.