How to Win the Meta-Negotiation with Lindsay Karas Stencel Esq., MBA

Hello, my friend, and welcome to another episode of Negotiate Anything. Thanks for spending time with us today. It's listeners like you in 181 different countries that have made Negotiate Anything the most popular negotiation and conflict resolution podcast in the world. I'm your host, Kwame Christian. I'm a business lawyer, mediator, professor, and the director of the American Negotiation Institute. Before we get started, I have two quick questions for you. Is negotiation a critical part of what you do? Do you need to resolve conflict and persuade at? If you answered yes to both of those questions, visit our website to learn more about our negotiation workshops. We've traveled the country working with professionals just like you and we'd love to have the opportunity to work with you too. Check out the link in the description to learn more. Lindsay, thanks for joining us today.

Oh, thanks so much for having me. Happy to be here.

Yeah, it is a pleasure. So how would you get started? By telling us a little bit about yourself and what you do.

Sure. My name is Lindsay Kara Stencl and over the past 15 years or so I've been lucky enough to wear a whole bunch of hats. I'm a licensed attorney in multiple states, Ohio, Michigan, and New York. I have a license pending in Illinois, so I like to collect legal licenses. We all have our thing, I guess. In addition to that, for the past 12 years or so I've served as chief legal counsel and partner for an early stage venture capital firm called NCT Ventures right here in Columbus, Ohio. So I've gotten a ton of great deal experience and really cut my teeth in the negotiation world from a very early age. And so it's been a wild ride and a lot of fun and I've been very blessed to be there. In addition to that, in 2010 I started what I call an accidental law firm. It wasn't intentional. I just tried to help some people out, get some deal documentation done and I didn't want to gouge them on prices. And you know, two turned into four clients, four turned into 16 and you see where the rest is going. And so I have this full blown law firm and it was never like the plan, but it served me well and it's been very, very cool and I've met a bunch of great people and I've got to represent a ton of venture funds really across the country. Then as if that's not enough, I was like, what else should I pull my time with in 2016? I'm born and raised in Buffalo, New York and I was just trying to figure out how that Entrepreneurial ecosystem worked. And so I became engaged with a nonprofit company up there called Launch New York. Launch New York is a 501c3 venture development organization focused on providing mentorship and funding dollars to companies in upstate New York. Because as you can imagine, upstate New York is not the beacon of entrepreneurial dollars and all of those types of things. So we're trying to really lay some groundwork there to make it the next Boston, Austin, Columbus, if you will. Of course, one of my favorite things to do is I teach venture capital law to budding legal eagles at the Ohio State University. So that's super cool. It's always been a passion and a dream of mine, so I'm excited that I get to do that. And then I own a CrossFit gym. I used to own two CrossFit gyms, but I sold one because it was just too much.

Wow. Well, thank you for joining us. I mean, geez, I don't know how you found the time. That's incredible.

We snuck it in. We snuck it in.

Yeah. That is fantastic. Yeah. We are super excited to have you on the show today because I think you probably have the most extensive deal background of anybody who's been on the show thus far. So maybe I don't know, but I know from talking to you beforehand you have some fantastic stories.

Sure do.

Which will be great to go over. And so the three things we're going to cover today are deal structure, frame busting, and perseverance, and how confidence fuels perseverance. So let's go ahead and start off with deal structure. Can you tell us a little bit more about that?

Sure. So deal structure is sort of the. If you want to think about taking the plane up to 3,30,000 or so feet, knowing what your parameters are that you're working around and what you're working within and trying to accomplish. So obviously there's a lot of back and forth to at least get to a meeting of the minds, if you will, on what the overarching deal structure is. And then as in anything that we do, the devil's always in the details. So as you're bringing the plane down to land, then you're thinking about all of the micro details and negotiation points that you're trying to negotiate from your top line point all the way to putting the plane back on the ground. And that could be anything from, you know, how does the money flow out? To what do the board seats look like? What does voting rights, what do voting rights look like? What do. What rights does, you know, the company or investor or entrepreneur have that you're representing. How do they control their own destiny? Maybe they don't. And so there's lots of these big beautiful pieces and parts, then when you put them all together in the puzzle, create this most amazing thing that I like to call venture deal structuring. It's very beautiful. I would say no one loves venture deal structuring more than I do, like in a really nerdy, geeky way. But yeah, a lot of, lot of fun and a lot of pieces and parts and it's just like so many balls to juggle to try to get to an end point. So that's what I think is cool about it.

That's really fascinating. And I love the metaphor of the plane, the 30,000 foot view all the way to landing, because details, that's, that's where it matters.

Right, right.

And so for a lot of people, when they're entering into this world of deal making, when it comes to deal structure, they're a little bit overwhelmed because there's so many different options that you could utilize. So when you start thinking about structure, what is your approach or how, where do you even start?

Sure. So my approach has always been like, I start from whether it's, I'm representing an entrepreneur, venture fund investor, you know, what is your goal here? Like, I need to understand what their high end goal here is. And I don't just mean in the transaction that's happening in front of us. I'm actually looking at what their goal is if we're going to exit the business in three and five years, like, what is their walkaway number? What is their, what do they want to see have happen so that they can achieve A and B and C. So I'm actually forecasting a lot of times three to five years into the future and then backing out from there. Okay. In order to achieve A and B and C three to five years from now, we need to do this thing right now and structure it this way so that way we know what we're working with. So we're setting ourselves up for success and not failure. As we continue to march through the next 36 to 60 months of time, it's important. You need to know where they're going. Right. You need to meet them where they are. Because not every deal is a cookie cutter deal. Everybody always jokes with me, Lindsay, get out the template. Just bust out the template for this deal. I've done literally thousands of deals and I think maybe a handful of them have been identical.

Wow.

Because everybody's Got a different. I mean, that's what you hire lawyers for in the first place, right? I mean, if you want certain things and you want it to be special and unique and different, particular to your circumstance, shouldn't you be calling someone who can help you actually get there? And a cookie cutter thing isn't always gonna work for you?

No, that makes a lot of sense. And as a lawyer, I get that a lot too. People think it's easy, but it's really. And I love your approach to strategizing. And I think it's, it is both high level and simple enough for people to understand it and apply it in not just very complex deals, but just everyday types of conversations. Because the, the simple approach to strategy is figuring out the goal projected into the future and then backtracking from there. What are the steps that I need to take in order to get there. And so a lot of times when it comes to the deals, people are just focused myopically in on what is happening here and now and they don't think about how it will impact them in the future.

Yeah, on many levels. Right. They don't think about how's that going to impact them financially, how's it going to impact their business, like the negotiations that they're having right now, what kind of damage are they doing if it's going too far or too hard right now. You know, when you're doing a deal with someone, a lot of times it's like getting married and marriage is hard. Okay. And sometimes it's great and sometimes there's bumps in the road, but like if you're starting out from a super rocky footing, you can imagine how that's going to end. So you got to think about a lot of things when you're doing this.

Kind of stuff that makes sense. And when it comes to deal structure, what do you think are some of the biggest mistakes people make when it comes to structuring the deal?

Sure. I think people get really caught up in, they get really excited by dollar signs. And dollar signs are important. You need to know the economics of your deal. But just as importantly, I think people forget about the control side of a deal. And so, yes, you need to understand the economics and how does that impact you? But I see a lot of things go terribly, terribly wrong because people just don't understand the control mechanisms that maybe an investor put in place or an entrepreneur wants to hold onto, et cetera. So it creates a lot of rub and tension and problem, particularly as you get farther into the relationship down the line.

Okay. So now when we're talking about control mechanisms, can you give us an example?

Sure. So I always say, you should listen to my talk about this. It's money, power, the key to deals. So you know, money, economics, power, control. So when you're thinking about control, you're thinking about what voting rights does a party have to make decisions that are going to impact the business? And that could be anything from what if the company wants to take on additional funding? Does a previous investor or group of investors have a right to say yay or nay to that? Do they have a right to say yay or nay? But we want to do it first. We want the right to invest first. If we're going. If you're going to take on more capital, it's how many board seats does a group have? So entrepreneurs love to control their own destiny and their own vision and all of those things. But if you give too many board seats away early on in your funding cycles, it's really hard for an entrepreneur for you to maintain the vision of your business unless you get investors who are really bought into the thing that you're doing. So you could lose control of your board. It's particularly around, I would say, voting and mechanisms that touch on voting. But they have these ramifications that could ultimately fundamentally change the course of the business. Because although investors and entrepreneurs in transactional work, we're theoretically all aligned, right? We're theoretically wanting to grow business, exit business for a lot of money, sit on the beach in Tahiti. That's my goal. But like, whatever, but theoretically, we're all kind of aligned there. It's just our pathways to ultimately get there are not necessarily aligned. So when you start to give up control or you do things that you know you have some missteps in the control bucket, how you get to the end result could be impacted.

Does your company invest in professional development training? If you believe that your team would benefit from a negotiation workshop, all you need to do is go to our website, fill out the workshop request form, and then we'll set up a time to chat. These workshops are completely customizable, and we've done them all around the country. Negotiation and conflict resolution skills are beneficial across all professions, but they're especially useful in procurement, purchasing, sales, sourcing and contract management. Our calendar is filling up quickly and we even have some workshops scheduled for next year if you think you might want one. I'd suggest reaching out soon so you don't miss out. Check out the link in the description to learn more. And now back to the show. That's brilliant. Yeah. So essentially, when we are looking at the deal structure, we have to think about those things. Money, power, respect. And focusing too much on the dollar signs can put us in a position where we lose control of the business ultimately down the road, which could cause more problems, bigger problems than we foresaw. Very cool. Well, we probably could have a whole episode on deal structure.

We could. It would be a neato burrito. I would really love it.

Let's move on to frame busting. And so when we're talking about the frames that are being applied in different conversations by different people within the conversations, what exactly do we mean?

Sure. So everybody's going to come at it. Everybody's the protagonist of their own story. Right. So everybody's coming at something from their own box or perspective. And so they're putting guidelines or guardrails, if you will, around a transaction. And maybe it's the transaction's only going to be X number of dollars, or it's, you know, we're going to close by X date, or we need to have these 15 control provisions built into this and a right to invest all the money in the future. And. And so you're thinking about what all of these frames are, and then you add a layer of complexity, and it's just human nature there, where you add this complexity of, you know, not all humans get along with other humans. And so sometimes people are expressing their framework in a very challenging way and you have to figure out, like, okay, how do I work through this person's whatever they're dealing with and portraying and putting out on me to get to. How do we get to a final deal that works for everybody?

Yeah, I love this point because when it comes to these conversations, it's really interesting to see that a lot of times people don't recognize that these frame games are happening. They just see it from their own perspective and they can't understand why the other person isn't responding very well to the things that they're saying. And for me, I think a great example of this comes from one of the guilty pleasures of, I'll say my wife more so than me, but I watch it with her, too. It's the reality tv, because you see fantastic examples of people just having horrible conversations. And so one person is talking about one thing in one way, another person is coming at it from a completely different perspective. They don't recognize that, and they just keep on talking past each other. And so the game that I play is try to identify the frame from one side and the frame of the other side and how they could bring it together. But if you don't recognize these frames are happening, you're going to keep on running into these barriers in these conversations, these invisible barriers, and not understand why things aren't going the way you want them to go.

Right. And sometimes people don't. They're not always very forthright with what their frames are either. So that makes it even more complicated because then you have to do like an extra layer of digging or pulling back, try to figure out what is it that they're trying to even say, let alone like, how do we get there and get the parties to agree on it. So it's a lot.

Exactly. I. One of the things that I like to focus on is validation. And the challenge that I give myself in these conversations is I say to myself, if I'm thinking that this person is completely rational, well meaning, and understands the situation, well, how can I. How are they seeing it in order for that to be true? Because a lot of times what we do is we say this person's crazy, they're hyper emotional, they're irrational, that type of stuff. And the problem is when we do that, we're giving all of the power to them. We're saying, well, because they're crazy, I can't even communicate with them. Right.

Yeah.

So that's just a disempowering approach. But the game, I say to myself, is it makes sense to them. And my goal is to try to figure out how. So I ask more questions, try to uncover that, and then once I figure it out, I let them know, hey, okay, I understand that. I reflected back and then I say, that makes sense. And when people feel as though they've been understood, then you start to have those breakthroughs in those conversations.

Yes, that is very true. Human connectivity.

And actually there was, when we were prepping, there was a story that you told me that I thought was fantastic. Can you share that with me?

Sure. So I do deal work, really across the country. And I was in upstate New York and I went to a group, asked me to come to their offices to have a meeting. Me, me, the person who was the fund manager and was effectively the decision maker. I came to their offices and this was like, like a year ago, so. And it's not like it was like 10, 15 years ago, so I must just be looking really youthful. And you'll know why as I tell you the story. So, yeah, I walk into their offices and the guy meets me and he's got a Couple other people from his office there. And he extends his hand. He's like, hi, Lindsay. How you doing today? I'm like, great. He's like, hey, is your dad coming to the meeting with you today? So I'm feisty, in case you haven't picked that up. And so I. I just looked at him for a second. I was like, no. Is your dad coming to the meeting with you today? And the guy lost his mind on me, starts yelling at me, and he's like, how dare you ask me that? My dad died years ago. And I'm like, how dare you ask me if my dad is coming to the meeting? So I said, if we're done with this blank, blank, can we just get to what we came here to talk about today and actually get a deal done? And it was just, like, very much a power play, like someone trying to just, like, make someone else feel small. I don't really put up with that in my life, so I don't. I don't need to. No one does. But, yeah, it was incredibly frustrating. But you're just sort of sitting there, like, thinking, like, where did you think this was going?

Like.

Like, in your mind, how did this play out, that it was going to end well for you? So it's interesting.

And so this. This is the brilliance of the story, because I think you handled it really well, because if people don't recognize the frame game that's happening, you can lose that frame game, and then you're in a position of subordination to the other side, because you were approaching it with the frame of, we are equals, and we're going to have a business conversation like adults, and let's talk about this money and whether we can make it together. And so he came to the conversation saying, I am an older male, and I am therefore better than you or superior. And I'm going to put this joke in. And if you accept it, it's almost like in chess, you accept the gambit. Right? But you recognized it as a power play, and so you didn't let that.

Well, no, I mean, that would have been a really, like, challenging meeting from then on out if you would have. Right. Like, I mean, you do have to see those things and recognize those things, and, you know, and that person is, like, a pretty heavy hitter in that region. So it was a little bit of a gamble, too, for me to, like, snap back and say, no, we're not doing this, because I do have to interact with that human pretty regularly. But it is what it is, and.

So let's let's ask you, I'm going to ask you to kind of project two different realities here. So we have the reality that we're in now based on the what you actually did where you didn't allow him to assert dominance over you. Now let's consider an alternate reality where you said, hahaha, no, he's not. All right, let's get to the meeting. And you just accepted it. So Gambit accepted in that chess game. So what do you think the relationship would have been like if you accepted it?

If I would have accepted it, I think that the relationship would have been something that's, you know, I just think it would have been something where that type of behavior continues to be okay for him and it would never be okay for me, which would then in turn create in his mind a lot of, oh, I'm in charge here. I'm the high, you know, the high man on the horse or whatever you want to call it. I don't care. And I'd be like, gosh, you know, and it's going to cause frustration within me because I'm like, I got to go meet with this yahoo who thinks like, he can ask me if my dad's coming to the meeting. You know, quite candidly, even though we have the reality that we have, I mean, there's still like a little bit of annoyance on my side because that it was even a conversation that was had. But I think if I would have said, hey, let me be submissive here and like, let's just accept that, I think it would have just put me back on my heels for every discussion that I would ever have with that human moving forward, absent some sort of catastrophic, explosive Lindsay event, like a Lindsay Kaboom type of event.

Because I don't think people recognize that the psychological impact of those types of interactions. Because the term I like to use is a perpetual line stepper. If they keep on stepping over that line and you don't do anything, they're going to say, oh, I can push it further.

There's a new line. There's always a new line.

Always. And that's the problem, because it's not just going to be at the inappropriate discussion, so now it's going to be pushed further. But also they realize, listen, you know what? I can push, Lindsay, I could probably ask for more now. I can leverage that for more substantive gains on my end.

And I'm not having it.

And we're glad. And the thing is for, for the audience out there, these conversations, they. They're not fun, right?

No. I mean, you walk like. Let's be clear. I've had a lot of these types of conversations over the last 15 years of my career. And I don't know if it's because, you know, I look like Malibu Barbie. You can't see me. We're on a podcast. But, like, I have tan skin, bleach blonde hair, you know, bright pink lipstick, and relatively fashionable, if I may say so myself.

And the earrings are fabulous.

And. But I think people just make assumptions because of that. And then, you know, they. They speak to you in a certain way. And so I've sort of just had to learn how to fight through a lot of those. And it's. You know, I'm just. I think I have an obligation to myself and other women that are going to come after me. That. That's not okay. That's not a right way to behave. That's not a right way to accept behavior. And you've got to stand up for yourself and others.

I love it. I love it. And I think this is a great opportunity to shout out Katherine Knappke's podcast, Shout It Out. Ask with Confidence. So that is the American Negotiation Institute's newest podcast, all geared towards women in difficult conversations. Because I don't want to be in a position where I'm forced to mansplain. That makes me uncomfortable. So I wanted to make sure I had content dedicated to that issue because it's important, and I think it needs to be done the right way.

Agreed. Couldn't agree more.

Perfect. All right, so let's move on to the last point, which is perseverance. So what do you mean by perseverance in this context?

So it's weird. And I talked to some of my colleagues who are in the space that I'm in. Perseverance is a funny thing when we're talking about deal structure, because you would think that people want to get a deal done. You would think they do, but there's this weird underlying current where everybody just sort of wants to talk about the deal or fart around on certain topics of the deal. And you literally have to just put your head down and almost bull rush through to be like, we are getting a deal done. And so it's perseverance in that capacity. And then it's just, you know, sometimes you just get deal fatigue because you've been talking about the same transaction for six months. I mean, there was one transaction I talked about for 18 months. Right. Like, you just. You get to the point where you start to open up your email and you have, like, a visceral reaction to seeing, like, certain names because you're like, here it comes, you know, now my whole day is ruined. And so you have to just, like, put your head down and say, like, okay, set, you know, emotions aside. I'm going to push this through. I'm going to get it done. And if it's. If it is doable, you know, I always have to caveat things that sometimes it's just not doable, and that's okay. The key to negotiations in my world is willingness to walk away. So you can't get too emotionally attached.

No, I agree. I agree. And that's something that people really struggle with with deals, because it's easy to say for us to say when a deal is not currently on the line, oh, yeah, just walk away. But for that person who's in that position where there's a deal that they've been working on for a long time, and they come to that realization, you know what? This might not work. How do they get the confidence to walk away when walking away is the right decision?

Yeah, I think that some of it is just so. It's very guttural. Right. You have to know when you know. You know, when is enough enough. Like, am I really getting anywhere or am I just beating my head against the wall? And you have to be comfortable in your own skin, because I will tell you, the world that I'm in is a pretty small world. Even though we do deals across the country and everything, we all kind of know each other. And you don't want someone, an entrepreneur or an investor saying, oh, well, these people negotiated this deal for 18 months and then they walked away. So you have to have the confidence in yourself to know I did everything that I could do and this just wasn't the best deal for me. And I'm going to catch the flak on the backside if I need to, and I'm going to do that with my head held high. And if someone doesn't like it, like, don't care, you know, and so that is actually hard for a lot of people to do because they get worried, like, well, what if so. And so gets upset with me? And what about this and what about that? And it's just human nature, but at the same time, like, it's just business. There's going to be more deals, there's going to be more transactions. We'll do something together in the future or we won't. You know, I mean, it's, it's. It all Works itself out. But you do have to, like, be prepared to say, like, hey, I might catch some garbage for this and I'm going to smile through it and it's going to be fine.

Exactly. And I think that that last part that you said is the key to it, the key to confidence when it comes to these conversations. You have to realize that you have the strength and skills and the longevity to survive after the deal doesn't go through, no matter what, I will be okay. And it's, for me at least, it's that general sense of okay ness regardless of whether or not the deal happens or it doesn't that can allow me to walk away when it's. When it's the right move.

Yeah. And I mean, let's be honest, that's hard stuff. I mean, that's sometimes, like, triggering from stuff back, like in your, like, youth, in your childhood. Like, am I enough? Is this okay? Am I going to be okay? Is everything else going to be okay? And it takes. It takes a lot to get to a place where you're like, you know what? No, it's okay. This doesn't work out. Cool if it does. Cool.

Exactly. Exactly. And so. And we have to blend that with empathy, though, because we have to see it from their perspective and understand it from their side. But not sympathy, because sympathy leads to pity. And if we pity the other side, then we make substantive concessions for their emotional needs, which is a big mistake when it comes to these conversations.

Yeah, I mean, empathy is important. Right. You need to understand why people are doing what they're doing, where they're coming from. And sometimes it has nothing to do with anything that they're talking about or what's in front of them. You know, this is something that's driving them at a very core level. It's part of their own fear narrative, if you will. Some people have. Some of those, they got to get things done or elsewhere else. Or else. And so you have to be aware of that. But you're 100% right. I mean, empathy, understanding where someone is coming from and saying, like, I hear you, is very different from, oh, my gosh, I feel so bad. Let's just get this done because, you know, you're sad today or whatever.

And I think we see that in the business world. We see that a lot in our personal lives, too. People making mistakes because of the feelings of other people. And the thing is, we need to be our best advocate because we need to have our own back. We can't assume that the other person is doing what they're doing because they have our best interest in mind.

No, they have theirs. Let's be clear.

Exactly. And so what's the saying? Quick yes leads to a lot of regret down the road.

Yeah, typically like that.

I typically say the way.

Yeah, I'm not sure the totally cool way to say it, but like, I mean, I'd rather have a quick no than a drawn out no. And then I'd rather have like a thoughtful yes than like shot from the hip yes. And then we have a whole bunch of problems that come after it because people didn't really think about what they were doing. They were just too emotional about whatever. And that happens a lot in my world. Right. There's a lot of machismo and whatever. People get really excited. I'll say machisma. There's a lot of ladies too. We get very excited about a deal. And you're like, well, all these other people want it and I'm here, duh, duh, duh. And you just like say yes and then you don't really think about the ramifications of it. And then trying to back out from that yes is sometimes harder than having just thought about it.

Exactly. Yeah. It's easier to come back from a no than it is from a yes.

For certain. For certain. Because once people start to rely on the things that you've said and whatever else, it just gets harder and it changes the dynamic of the discussion too because people like, you're, you're retrading on me. You're. You're changing the rules of the game. And that never feels good either. Right. Like, I never want someone to be like, you told me yes under these conditions. But now it's like sort of yes, but totally different conditions. That's. It's just hard.

You don't want to be in that position. You don't want to have to.

No, no, no, no.

That makes a lot of sense. No, I love this. And. Oh, wow. We are at 30 minutes.

So bingo bango, we're really knocking it out here.

Yeah, we should wrap now. But before you go, can you tell the listeners where they can get in touch with you if they're interested?

Sure. So I'm not going to put my phone number out on the Internet machine, so I'm not going to do that for you. But if you are interested in reaching me, you can reach me via email. So it's Lindsay L I N D S A Y at Wrule vc. So I'm undertaking a new initiative with some friends of mine to try to get more venture capital dollars and other investment type of capital all throughout the cap stack into the hands of female founders. So female founders don't get a ton of funding traditionally. So we're trying to figure out cool new mechanisms and pathways to help them get funding.

That's fantastic. Thank you so much for coming on the show. We appreciate it.

No problem. Thanks for having me.

My pleasure. And listeners, if you're interested, we're going to have a sparring session and it's going to be fantastic. So keep your eye out for that. Hey, thanks for listening to this episode. If you're liking what you're hearing, please leave a review and subscribe and tell your friends. Our goal is to help as many people as possible and when you leave reviews it makes it easier for people to find us in the searches. Thanks again for being a listener. I'll catch you in the next one.