12 Negotiation Tips for Getting Sponsorship for Your Startup
Negotiation for sponsorship is a daunting process that can get overwhelming if you are not prepared. In most cases, the sponsor has massive bargaining power, and you are at their mercies. The sad part about startups and, life in general, is that there is never enough money to cater for all needs. Most early-stage founders will tell you that they never had enough cash for their businesses. Nobody seems to say that there is plenty of cash when starting any business, at least rarely.
Therefore, sponsorships are the answer to money problems in most startups. Lack of enough funding can fracture a business to its downfall. It is imperative to be confident in the way you approach the sponsors, whether physically in a meeting or virtually via phone. Make sure that your sponsor understands the value of placing his or her cash in the business. It should be clear that they are not running at a loss but rather investing for huge returns – this is sweet music to any investor.
Landing on the right sponsorship deal can prove to be the big break that your startup needs. Here are twelve of the best negotiations tips to ensure you increase your chances of getting that sponsorship for your startup:
1. Get out of the norm
Nobody is interested in listening to mainstream ideas that everyone seems to table. Be unique in your pitch and see what wonders it will do for your sponsorship chance. New ideas always win over cliché variants that hold no basis. Make the panel understand that they have a lot to gain by working with you for some fantastic reasons.
Think outside the box and create meaningful ideas that are bound to captivate and catch the attention of your panel. Ask yourself, how is my pitch different from all the others? Once you answer this question, you are on track to creating the most potent and creative pitch ever seen and heard.
2. Make it clear what is in for the sponsor(s)
It is quite rare for any person to throw moneybags at you just because they love you or your pitch. Well, unless it is a work of charity, sponsors want to hear what they will gain beforehand. Otherwise, you have lost them completely. Whether it is in the popularization of their brands or through profits, let them know clearly how they will benefit from your collaboration.
It may even be access to prospects for the sponsor’s business or platform. It does not matter what type of benefit you offer, so long as it will interest them, you are in for a deal. This is precisely what every mogul wants to hear.
3. Be stern and confident
Sponsors love to see someone oozing with confidence during his or her pitch. This gives them faith that you know what you are doing. Always wear a stern face and be confident in your pitch. Make sure that you have done your homework well before heading to the meeting. Learn about the marketplace and the possible deals that can take place. This way, even when they want to push you to the wall with lower prices and conditions, you will have an escape route.
Stand firm and point out the reasons why you cannot accept a lower price. If not, let them know that a lower price comes with lesser benefits and profits on their ends. Throw the ball on their court instead of having it on yours.
4. Know your worth
Never let the other side put you down on your knees. Know how much your startup or idea is worth and let it resonate with them clearly. In most cases, sponsors will only push you to the wall if you do not know your worth. They will attempt to get a fatter share at your expense if you are not vigilant. After all, everyone at the table is looking out for his or her interests and, you should do the same.
It is not about landing on any deal. It is more of getting the best deal. You need not accept any proposal if you think it is not good enough for you – you should counter and drop the deal. Before going to that meeting, understand first what you are bringing to the negotiating table. Besides, you need to check the sponsors need, their preferences and interests in the deal. This will help you make the right decision on what exactly to say or offer. Do not lower your asking fee simply because the other side is tough on you.
5. Do not promise everything upfront
Yes, it is excellent to make your deal stand out and try selling your startup using all types of promises. However, know the limits of what to say. Keep some of the benefits away from the negotiating table, as the sponsor may have a better deal to offer. When compared to reducing your asking price, this is better. What you can do is to have these promises as a bonus after both parties sign the deal or make some huge milestones.
6. Have an open mind
Negotiation is not an easy process. Both parties have to be creative and firm to get the best deal. Besides, both of you equally need to have an in-depth analysis and understanding of that business.
You need to allow the creativity to flow from one party to the other. Remember, this is also a chance for you to learn new tricks and tactics. Make sure that the deal you get is relevant for your startup. However, you need to understand that the sponsors are probably more experienced and might have the right capacity to advise you accordingly. Never throw their advice under the bus, even if you do not agree with them at that particular moment. Listening is free, after all.
7. Avoid outright stinginess
We understand that you are trying to make the best deal for your startup. However, this does not give you the license to be too stingy to the sponsor. Sometimes the more you have to offer, the better your chances are for landing on the perfect deal. Remember, you are dealing with sponsors who are in it for the money. They also want an agreement that can increase their profits and, in the end, boost their finances. Therefore, if you do not offer enough steak for them to wet their beaks on, you are on the lane to ruining your chances.
8. Be real
No need telling lies and faking what does not exist. If anything, this will only jeopardize your chances of landing on the best deal from the sponsors. When they ask you a question, and you feel that you do not have the right answer, simply ask for a chance to research and tell them that you lack the answer at that moment. This is better than telling a lie.
Also read: Common Traits of an Entrepreneur that Leads to Huge Success
9. Create a definite pitch from the start
You can employ any techniques to achieve this. For starters, you can incorporate intelligent jokes and try to make the presentation lively. Make sure you do not lose your audience before the submission is over.
10. Point out any problems with the startup
It is better to be honest, and tell the sponsors of any possible issues during the deal. Imagine a scenario where you sign the deal; then, the clients discover a loan that the startup was unable to clear. This would ruin the trust between you and the sponsor(s) thoroughly.
11. Develop a relationship with the sponsor(s)
It is eminent to make the sponsors understand that your startup has a relationship with their brand or business. Whether through the values that you share or the primary visions and goals for both entities, it is quite necessary to let them know.
12. Show them what motivated you
Sponsors are very keen on this point. They want to hear your story and want to know why you came up with the startup. The chances are that they will use your motivation as one of the determinants for the funding – be careful what you mention.
I hope that the tips above will prove helpful in your quest to get the right sponsorship for your startup. If you’re a student or fresh graduate still starting out and seeking help with your research or case study, this writing service could be of immense help. All the best!