Negotiation & Deal-making

Welcome to Negotiation & Deal-making at Kaern Schools. This course is for founders building Kaern startups — the people who, on any given Tuesday, are haggling with a supplier, persuading a senior engineer to take a pay cut for equity, talking a VC up half a turn on valuation, or untangling a co-founder dispute that's quietly killing the company. Your tutor is Sol, who has sat on both sides of the table: as an operator closing channel deals and as the founder who once gave away too much because he didn't know what his alternatives were worth.

Who this is for: Founders at any stage who negotiate with humans — which is all of you.

Outcomes. By the end you will be able to:

• Walk into any negotiation knowing your BATNA and reservation point cold.
• Prepare a negotiation in 30 minutes using a repeatable framework.
• Separate what people say they want from what they actually need.
• Expand the pie before you fight over slices.
• Recognise and counter common tactics and psychological pressure.
• Hold a difficult conversation without burning the relationship.
• Close cleanly and structure a deal so it survives contact with reality.

Sol teaches the way deals actually happen: messy, human, high-stakes. Every lesson ties to a real founder moment. Let's begin.

Module 1: Negotiation Fundamentals & BATNA

Learning objectives

• Define negotiation as joint decision-making under disagreement, not combat.
• Calculate your BATNA and reservation point before any negotiation.
• Estimate the other side's BATNA to find the zone of possible agreement (ZOPA).
• Recognise when not to negotiate at all.

Lesson 1.1 — What negotiation actually is

Teaching script (Sol): Picture two kids splitting the last slice of pizza. One cuts, the other chooses. Nobody trusts anybody, yet the system produces a fair result — that's negotiation in its purest form: a structure that lets two self-interested parties reach a decision they both prefer to walking away. Notice what it is not. It's not winning. It's not charm. It's not the person who talks loudest. Most founders walk into their first supplier call believing negotiation is a personality contest, and they lose to a procurement manager who has done this ten thousand times and feels nothing.

Why this matters: as a founder you negotiate constantly — vendors, hires, investors, co-founders — and almost none of it feels like "negotiation," so you do it badly on autopilot. The moment you reframe it as joint decision-making under disagreement, your job becomes clear: understand both sides' interests, find the overlap, and structure a deal. Less drama, more engineering.

Here's the mindset shift I want from you this week: stop asking "How do I win?" and start asking "What decision do we both prefer to no-deal?"

So — think of your last negotiation. Were you trying to win, or to find a shared yes?

Lesson 1.2 — BATNA: your real source of power

Teaching script (Sol): BATNA stands for Best Alternative To a Negotiated Agreement — the thing you'll do if this deal falls through. It's the single most important number in the room, and most founders never calculate it. Think of it like a poker player who knows the size of their stack. You don't bluff harder; you simply know exactly how much you can afford to lose, and that calm shows.

Here's why it matters more than your skill: power in a negotiation comes not from need but from not needing. If your only manufacturing quote is from one supplier, they own you. If you have three quotes, you're free. The founder who can genuinely walk away always negotiates better — not because they're tougher, but because their walk-away is real.

Two numbers fall out of your BATNA. First, the BATNA itself: your best outside option. Second, your reservation point — the worst deal you'd still accept versus walking. Below that line, you leave. You decide that line before the emotion of the room, in the cold light of your spreadsheet, never mid-conversation when adrenaline is lying to you.

What's your BATNA in the most important deal you're working on right now — and have you actually improved it, or just hoped?

Worked example

A Kaern founder, Mara, needs a contract dev shop for a 3-month build. Shop A quotes €60k. Mara's BATNA: hire a freelancer she trusts for €45k but with two weeks' delay. Her reservation point becomes "€60k only if they start immediately and absorb the two-week risk." Knowing this, when Shop A pushes to €68k she calmly declines and signs the freelancer — no regret, because her line was set in advance. Six weeks later Shop A circles back at €52k. She now has leverage she manufactured by being willing to leave.

Hands-on exercise (role-play)

Pair up. Founder A is raising a €25k bridge from an angel. Founder B plays the angel who "really likes the team." Before the role-play, A writes down their BATNA (e.g., extend runway by cutting one contractor) and reservation point on paper, face down. Negotiate for 8 minutes. Then reveal the paper and debrief: Did A drift below their reservation point under warmth and pressure? Swap roles.

Common mistakes

1. Treating "I really need this deal" as a strategy instead of a weakness to fix.
2. Calculating BATNA mid-negotiation, when emotion contaminates the math.
3. Confusing your target (what you hope for) with your reservation point (where you walk).

Check for understanding

1. In one sentence, what is the difference between your BATNA and your reservation point?
2. A supplier knows you have no other quotes. How does that change the negotiation, and what should you do before the next call?
3. Why does the ability to walk away improve a deal even when you don't walk?