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Art of Negotiation: What to Do When Your Investors Say No

Some of you may be directed here by my YouTube videos on how to start a hedge fund: guide for emerging managers.  This article is written as supplementary information to the second video on hedge fund capital raising, but can also be read alone for anyone who’s frustrated by numerous “NO” from investors.

Before you go into the presentation or negotiation that follows,  I hope you are well-prepared already.  By being prepared, I’m asking you to research your audience, build some alternative options, collect supporting evidence to back up your proposal.

Second: disarm them.  Many people are automatically on guard after they say “no” to you.  They expect you to either attack them by persuading them they’re wrong, or give in by agreeing to what they ask for, or simply walk away.  Surprise them by taking none of these reactions.   Disarm them with the magic word yes, and by acknowledging their authority and competence.

After disarming them, you still need to present your ideas, and you need to do it without provoking.  Try the following techniques:

Negotiation can be a full course by itself.   Hope these tips can help you deal with some of the difficult situations.  You may find another article helpful as well: What Are Asset Allocators Looking For in a Start-up Fund?  Happy reading!