Why best alternative to a negotiated agreement (BATNA) matters to a first-time founder
Your best alternative to a negotiated agreement, or BATNA, is the best realistic action you can take if the current negotiation ends without a deal. Knowing it protects you from accepting terms worse than walking away and shows where to improve your leverage before negotiating. It must be specific and achievable.
Examples of best alternative to a negotiated agreement (BATNA)
A Portuguese agency negotiates a €60,000 annual contract with one client. Its BATNA is not ‘find another client’; it is a signed €42,000 project with a different buyer that starts next month. After allowing for delivery costs and risk, the agency can compare the current offer with that concrete fallback.
Common misunderstanding
A BATNA is not your ideal outcome, opening demand or bottom line. It is what you will actually do without agreement. A vague hope, such as raising investment later, is not a strong BATNA unless it is genuinely available. Each party has its own BATNA, and neither side may know the other’s.
When to use it
Use BATNA before negotiations with investors, customers, suppliers, hires or acquirers. List credible alternatives, estimate their value, cost, timing and risk, then identify the best one. Work to improve it before talks begin. Reassess it when circumstances change, and do not bluff about alternatives you do not have.