Desirée Stolar, a recent Harvard Business School graduate and entrepreneur, dives into her high-stakes negotiations surrounding her startup, Unshrink It. She shares the intense dynamics of preparing for Shark Tank, including equity splits with her co-founder and navigating the sharks' contrasting personalities. Stolar discusses how they adapted their pitch in real-time and the critical lessons learned about relationship-building and strategy. Her unique insights highlight the pressures of negotiating under duress and the importance of continuous learning in business.
Des Stolar's journey illustrates that strong negotiation skills stem from learning from mistakes, thorough preparation, and effective persuasion.
The initial negotiation challenges regarding equity splits highlight the necessity of open communication and understanding each member's contributions and expectations.
Stolar's experience in Shark Tank emphasizes the power of storytelling and relationship-building in effectively pivoting during unforeseen negotiation challenges.
Deep dives
The Art of Negotiation
Strong negotiation skills are essential for success in business, as demonstrated by the experiences of Desiree Stoller during her early career. In her negotiations, she embodies three vital skills of effective negotiators: learning from mistakes, thorough preparation, and adept persuasion. The podcast highlights how these skills, when applied correctly, can lead to favorable outcomes, even in high-stakes environments like negotiations involving equity splits and funding. Stoller's journey emphasizes that a well-developed strategy combined with an understanding of psychological dynamics can significantly improve negotiation efficacy.
Understanding Equity Splits
Negotiating equity splits among founders can be a complex and emotionally charged process, as Stoller's team discovered. Their initial negotiations became fraught with tension due to a lack of preparation and understanding of each member's future contributions and expectations, ultimately leading to disagreements. With the deadline looming and differing perspectives, the team opted for a unilateral decision-making approach, which resulted in a fractured relationship among the founders. This episode serves as a cautionary tale on the importance of open communication and prior discussions to clarify everyone’s roles and contributions when determining equity.
Manufacturing Negotiations
As Stoller prepared for the Shark Tank experience, her team faced another significant negotiation challenge involving their manufacturer, Sourcecentra. After receiving unfavorable terms from the CFO, the team devised a strategy to renegotiate better conditions, leveraging their previous connections and the personal rapport built with the CEO. This second negotiation contrasted sharply with their earlier experience, showcasing the importance of tailored approaches and appealing to emotional and relational aspects. By aligning the negotiation to mutual goals and emphasizing long-term partnerships, Stoller and her team effectively improved their position.
Pitching on Shark Tank
Preparation was paramount for Stoller and her co-founder as they approached their appearance on Shark Tank. They meticulously studied past episodes to understand successful pitch strategies, anticipated questions, and tailored their responses to highlight their strengths. Stoller emphasized not just their product but also their identities as founders, overcoming initial skepticism from investors through a compelling narrative about their background and vision. Their success on Shark Tank illustrates the value of engaging storytelling and the ability to pivot during a negotiation, especially when faced with unexpected challenges.
Closing a Deal
After the show, the negotiations with Mark Cuban's team presented another layer of complexity, emphasizing the importance of building a rapport. Stoller noted the need for establishing a genuine connection, which she initially felt was missing during their first meeting discussing the term sheet. Realizing the importance of relationship dynamics, she orchestrated a follow-up meeting to solidify that connection and clarify their working relationship. Ultimately, the decision to withdraw from the deal wasn't a failure but highlighted Stoller's priorities in fostering meaningful professional relationships over acquiring capital, emphasizing a long-term perspective in negotiations.
Fresh out of Harvard Business School, entrepreneur Desirée Stolar and her co-founder must negotiate equity splits and a tricky manufacturing deal before they are unexpectedly chosen for Shark Tank. They must prepare carefully—the numbers, the very different “sharks’” personalities, and the high-profile process—and ultimately receive an investment offer from Mark Cuban, after which some very unexpected negotiating twists and turns ensue.
About the Podcast:
From Disney’s acquisition of Pixar, to trade agreements with China, pivotal Blackstone deals, and the peaceful end of apartheid in South Africa, landmark agreements are often spearheaded by savvy negotiators who employ winning strategies and tactics.
I’m Jim Sebenius, your host for Dealcraft. For decades, I've practiced, researched, advised high-level clients, and taught effective approaches to complex negotiations. These experiences led me to create Dealcraft. I welcome you to join me each week as I share fascinating deal stories and distill practical insights for listeners to apply in their own toughest negotiations.
