Deal Terms
Best Alternative to Negotiated Agreement (BATNA)
The most advantageous alternative a party can pursue if negotiations fail — the foundation of negotiating leverage.
BATNA is a negotiation concept critical in venture financing. A founder's BATNA is their best option if they don't accept a VC's term sheet — whether that's another investor's offer, bootstrapping, or shutting down. Strong BATNAs create leverage.
In Practice
With competing term sheets from two top-tier firms, the founder's BATNA was strong enough to negotiate away the participating preferred provision.
Why It Matters
Understanding your BATNA prevents accepting bad terms out of desperation. The best fundraisers always have alternatives, even if they prefer one investor.
VC Beast Take
Your BATNA is your superpower at the negotiating table. If you don't have one, create one before you sit down.
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