1.

Introduction of the case

An entrepreneur in the software industry named Illai Gescheit conducted seed stage
fundraising negotiations with two private investors in Tel Aviv. One of the investors did not
take his proposal seriously and informed him that people would not utilise his idea since it
was "boring." Gescheit was left feeling profoundly insulted by this remark, and as a result,
he chose against working with the investor. Illai Gescheit, a successful designer,
technologist, innovator, and "product person," was holding discussions for seed finance with
two private investors. Gescheit presented his invention in a way that was very animated and
enthusiastic; nevertheless, the investors did not take his presentation seriously and informed
him that his product was "boring" and that people would not use it. Gescheit's pitch was
unsuccessful. Gescheit developed the Mobifile technology for the purpose of the smartphone
market; however, investors were not impressed with his presentation and informed him that
his product was "boring" and that consumers would not use it. Gescheit made the decision
not to collaborate with the investors and instead established his own business.

2. Based on the case study, discuss these questions: -

a) Discuss the key issues/problems/dispute/conflicts that you could

diagnose from the case?
The failure of the entrepreneur and the possible investors to communicate effectively
with one another and to comprehend one another's perspectives are the primary
problems that can be deduced from this scenario. The fact that there is a lack of
trust between the two parties is another factor that contributed to the entrepreneur's
sense that he needed to defend himself and was insulted by the statements made by
the investors. Both parties became tense and their feelings were damaged as a
result of this situation. Because of this, there is a lack of trust, and people have the
impression that the entrepreneur cannot speak her mind. Before making any
assumptions about the goals or motivations of the other party during subsequent
encounters, it will be essential for both participants in the conversation to
demonstrate active listening skills and make certain they have a mutual
understanding of one another.
To explain, one problem that can be diagnosed from the example is a lack of
communication, which will be covered in the next section. The entrepreneur claims
that he and his team are "extremely strong communicators," but this claim is not

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 supported by either their presentation or the questioning that follows. What does
appear to be the case, however, is that there was a failure to effectively
communicate with the investors about their business and the reasons for the current
(unsuccessful) trajectory of their sales performance. This seems to be the case for a
number of reasons. A failure on the part of the entrepreneur to communicate
effectively with potential investors is yet another significant challenge that can occur.
Because they are "all business people," there is an assumption that they will have
similar levels of knowledge about one another's points of view. However, it became
apparent through the questioning of both parties that this was not the case; rather
than having more in common than what was initially apparent, the individuals
involved had actually quite different viewpoints on how business should be
conducted. In addition to this, there was little trust between them; each participant
looked to be feeling defensive and upset by comments made by their counterpart
when being questioned.

b) Develop your best BATNA or negotiation checklist, and discuss your

option/(s) to achieve your objective in this negotiation, i.e., to agree or to
withdraw.
As David Lax and I (1985) have explored in other places, the fundamental idea that
underpins BATNAs in negotiation has a long and rich intellectual history. It may be
traced back to game theory, where it is known as "threat" or "disagreement" points.
The best option for the entrepreneur in this negotiation would be to try to establish a
better understanding with the investors. This can be done by clarifying the goals and
objectives of the product, and by providing more information about the product and
its development process. The entrepreneur should also try to build trust with the
investors by being open and honest about the product and its potential; if these
efforts fail, he should consider offering more money in exchange for a lower equity
percentage.
BATNAs often play other key roles during negotiations, not just in the case of
impasse (Sebenius, 2016). For an explanation, there are a number of things that we
would like to do to prepare for this negotiation. First, we need to develop the best
BATNA or best alternative to negotiated agreement. This will be a written list of our
options at the end of the negotiation process which include "Agree" and "Withdraw"
(if neither party is willing or able to agree). The entrepreneur should also try to build
trust with the investors by being open and honest about the product and its

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 potential. In addition, he must bring another member of staff who knows about all
aspects of the business, this would improve his credibility as he can respond
confidently when questioned by his investors.
The best way for the entrepreneur to achieve their objective in these
negotiations is to try to establish a better understanding with the investors. This can
be done by clarifying their goals, objectives and needs. They should also try to build
trust with these investors by being open and honest about their product and its
potential. To make this possible, more time has to be spent explaining how the
product works and why it is different from existing products out there in the market.
A good negotiator generally has more than one option to achieve their
objective in the negotiation. In this case, the entrepreneur would want to come to an
agreement with the investors, if possible. However, if that does not work then he or
she may withdraw from the negotiation. Another option is to try and get more
information from the investors about what they are looking for and how they
measure success so that he can be better understand to their position and
expectations. This may also help him clarify some questions that are still unclear by
allowing him to ask questions directly rather than relying on assumptions.

c) Suggest an appropriate negotiation strategy/plan to solve the conflict.

Negotiation is a process of both parties discussing their goals and trying to find a
compromise that is acceptable to both. Negotiation occurs whenever people cannot
achieve their own goals without the cooperation of others (Thompson et al., 2013).
In some cases, the investors may have a stronger position than you, as they are
offering more money than what your current company is worth. Although,
negotiators may have several sources of structural power (French & Raven 1959),
the most commonly investigated source of power is the negotiator’s best alternative
to a negotiated agreement (BATNA; Fisher & Ury 1981). It would be appropriate to
discuss possible ways in which the company can offer something more attractive to
them, such as by paying off debts or providing additional services that bring in more
income in the future. It would also be helpful to try to understand their perspective,
and see if there are any issues regarding the current product line which could be
improved upon or removed completely.
One strategy for dealing with this conflict would be to try to understand the
position of both sides, and to find a compromise that would be acceptable to both.

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 The company's goal is to attract investors in order to raise capital, while the
investors' goal is to have access to a stable dividend payment. It would be helpful if
both parties’ make their needs clear and try to understand each other's perspective.
Our main goal would be to help the investors avoid litigation, and to reach an
amicable resolution that would be acceptable to both parties. We would look for win-
win solutions, by trying to see if there is another way, we could address the goals
and concerns of both parties. We would also try to understand the investors'
perspective and find out what they are looking for in order to come up with solutions
that might address some of their concerns and still meet our goals.

3. Conclusion

The implications of your suggested actions or decisions in managing the negotiation process
are to be mindful of the potential negative outcomes that can develop if a corporation
refuses to accept a proposal. At various stages of the growth process, from the "seed" stage
when the business is just an idea to later stages when the company is generating revenue
and facing expansion challenges, being the CEO of a start-up company entails a variety of
negotiations with partners, potential partners, investors, and others (Dinnar & Susskind,
2019). If the entrepreneur does not agree with the company's request for a higher price, he
or she would be wise to reconsider the idea and examine alternative options. Searching for
a new supplier or modifying the product or service they provide are both viable options. " In
this scenario, the business owner would be wise to reconsider the suggestion and
investigate other choices." If the entrepreneur decides to reconsider the idea, they should
investigate alternative choices such as finding a new supplier or modifying the product or
service they are providing. Searching for a new supplier or modifying the product or service
they provide are both viable options. The entrepreneur has a few additional possibilities.
Investigate the competition as a first step. If the entrepreneur wants to start a successful
business, they should research what other companies are doing and see if they can benefit
from their failures. Consider the market as the second choice. The entrepreneur could
conduct research into the market to determine the existing state of affairs. The
entrepreneur might also investigate the competitors to discover what they are doing to
improve their company. Look at the consumer as a final choice. The entrepreneur could
inquire as to whether the customer is satisfied with their existing product or service. If an
entrepreneur is looking for a new product or service, they should check with their customers
to see if they are happy with what they have now.

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References

''Dinnar, S., & Susskind, L. (2019). Real Entrepreneurs Describe Their Mistakes. In
Entrepreneurial Negotiation (pp. 61-125). Palgrave Macmillan, Cham.''

Fisher R, Ury W. 1981. Getting to Yes: Negotiating Agreement without Giving In . Boston,
MA: Houghton Mifflin

French JRP, Raven B.1959. The bases of social power. In Studies in Social Power, ed. D
Cartwright, pp. 150 – 67. Ann Arbor, MI: Inst. Soc. Res.

Lax, D. A. and J. K. Sebenius 1985. "The Power of Alternatives or the Limits to Negotiation."

Sebenius, J. (2016). Batnas in negotiation: Common errors and three kinds of “no.”
Microsoft word. Retrieved June 17, 2022, from
https://www.hbs.edu/ris/download.aspx?name=17-055.pdf

Thompson, L. L., Wang, J., & Gunia, B. C. (2013, January). (PDF) negotiation -
researchgate. Researchgate. Retrieved June 16, 2022, from
https://www.researchgate.net/publication/292887782_Negotiation
DOI:10.4135/9781452281988.n13