Chapter 31: Chapter 31: Unscrupulous Tactics
In any negotiation, the simplest path to success is by giving the other side what they want.
This isn't surrender—it's finding equilibrium in mutual interests. Had Microsoft's negotiator been Bill Gates himself, Martin would've shared his prized Beatles vinyl along with Lafite's absinthe (yes, the famed winery produces it, though few acquire the taste) while waxing poetic about Facebook's stratospheric trajectory.
But facing a mere VP from Microsoft's venture arm? Martin delegated the dog-and-pony show to Facebook's planning team. A flashy PowerPoint—juxtaposing Facebook's explosive growth against MySpace's stagnation—was all the mid-level exec needed to save face back in Seattle.
Three days later, a Microsoft board director arrived in California with a legal battalion. Martin sent Zuckerberg to schmooze on the golf course while he and Priya faced off against Microsoft's lawyers. The talks were a tense diplomatic showdown, with all the shabang of calculated smiles and veiled threats.
Within two days, every clause was settled… except valuation.
Frankly, Martin pitied the Yale-trained lawyers Zuckerberg had axed. Their draft terms were airtight—no wonder he'd coasted through 170 pages of agreements. The real battle lay in agreement about the current valuation of the company.
Hence enters the bet-on agreements or Valuation-Adjustment Mechanisms (VAM) for tech savvy.
Don't scoff at it —since the dawn of trade, wagers have been used to smooth out the way for negotiations. Take Futures markets as an example , they are in layman terms institutionalized betting markets. So to remove valuation deadlocks a VAM was added in which valuation was contingent upon its future performance against predefined metrics . All that mattered was Zuckerberg's faith in my decision.
And faith he had. Since founding their "mutual aid society," Martin's macroeconomic forecasts had been proven infallible.
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On the third day, Martin strode onto the greens wearing Slazenger's royal-approved golf gear—a sartorial nod to Clark Hunt, Microsoft's 70-year-old British director and honorary knight.
"I'd thought Americans disdained their roots," Hunt remarked, eyeing Martin's ensemble.
*Try squeezing into these pants,* Martin inwardly groaned, smiling. "Tradition inspires innovation, Sir."
As they teed off, Zuckerberg played the eager pupil: "Mr. Hunt's pro!, I'm just here to lose gracefully."
Hunt chuckled. "Youth has its priorities. At your age, I'd have chosen spreadsheets over sand traps too."
Martin's first drive hooked wildly. "God's whims, not mine" Hunt consoled, ever the diplomat.
Then, a fluke hot happened. On the 15th hole, Martin's ball arced into the cup. "$500 tips all around!" he whooped , Zuckerberg added burgers, Hunt added Cokes. The camaraderie cost less than a billable hour.
By the 17th, scores laid bare their skills: Hunt (69), Martin (75), Zuckerberg (77). Amateurs, save the knight.
At the final tee, Hunt spoke up "About your valuation bet, Let's raise the stakes. Birdie this hole, I will accept the valuation of $18 billion, but if you miss $12 billion."
Six billion on a swing.
Zuckerberg glanced at Martin nervously.
Martin adjusted his grip and swung forcefully "Instead of the bet how about we meet halfway at a $15B valuation with a $300M max investment? Or..... who knows i might actually put it in hole "
Before Hunt could protest, Martin launched his drive. The ball landed 30 feet from glory, a pro golfer could almost certainly make a birdie. But for an amateur like Martin, it was all up to God.
But Martin didn't care. If young people dint play dirty who will ?.
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