In a New York Times post about the success of recent high-profile entrepreneurs at retaining equity in their companies, Steven Davidoff concludes “[t]hese entrepreneurs appear more savvy than earlier Internet moguls, but their success owes thanks in large part to an old guard in Silicon Valley that is eagerly advising the new generation on the pitfalls” of selling their equity too quickly or cheaply.
Precedent – what has happened in the past in similar negotiations – is a powerful independent standard for determining what is now “fair and reasonable.” It can also help you identify and avoid the errors committed by your predecessors. So when preparing for significant negotiations, take the time to research previous similar situations and learn from the mistakes of others.