A Monster.com member writes:

"A friend of mine asked me to join his dot.com start up, which is about to get VC funding. The opportunity is exciting and the salary offer is acceptable. However, the amount of stock being offered is below what I had expected, and I feel insulted by it. Basically, I would be employee #5 and would be in charge of business development. He has offered me 0.5% of the company (post-financing), but I think that I should be getting at least double or triple that amount, given the early stage of the business. I know that both of our positions are within the typical range of stock option grants, but we are obviously far apart on these numbers. Please advise."

The Negotiation Coach responds:

Overcoming negotiating impasses is one of the hardest challenges facing an executive negotiating to join a new company. You certainly do not want to lose a good opportunity, or burn bridges with the individual(s) with whom you will work closely to build a successful venture. At the same time, you do not want to sell yourself cheap, or demonstrate poor leadership skills. Here is a two step process for navigating the problem you have described. It should help you bridge the gap between these negotiating positions more effectively than what you have tried before.

1) Prepare

Think through your own position
One way to get unstuck is to think through the interests that underlie your stated position. Why are you focused on obtaining 1-1.5% and so resistant to considering a different figure? Would a lesser amount leave you feeling less valued? Do you suspect your friend is trying to take advantage of you with an unreasonably low offer? Do you need a threshold amount of stock to forego other opportunities (and actual cash)? Apart from the actual number of shares, what other terms of the stock options do you need to have in order to feel comfortable saying yes? What other type of compensation would lead you to accept a lower amount of stock options? What would you do if you walked away from this offer - how would you feel? Answering these types of questions should give you clarity on your own motivations, and help you open yourself up to other possible solutions. At the very least, this reflection should help you articulate why you find the current offer unsatisfactory, and your key interests that have to be addressed in order for you to agree to any offer.

Think about your friend's position from her point of view
Another way to move past this impasse is to deepen your understanding of how your friend views this situation. Ask yourself, how would she justify this offer? Why is she so reluctant to budge? Does she feel that it is the only right number? Does she feel pressure from her founding partners and investors not to give away too much stock? Does she feel that you are trying to take advantage of her, or that your number is unrealistic? Analyzing the problem situation as she sees it will likely help you understand where her resistance is coming from, and that knowledge helps you develop a strategy for persuading her.

Take the perspective of a knowledgeable outsider
Considering how an objective, knowledgeable third party would view your situation may help you approach it more logically and less personally. Instead of attacking your friend's position, or repeating your own, think about how a third party would view the reasonableness of these numbers. What data and arguments would persuade them? How might your current argument fall short, and what might you do to make it more persuasive and credible? How might this person resolve your dispute? Once you begin this line of thinking, you should consider testing your thoughts by talking with some experts who know your industry and have experience with the compensation issues over which you are fighting (such as an attorney, accountant, executive recruiter or venture capitalist).

2) Use Your Preparation to Think Creatively

Considering these three distinct perspectives should help you think of some new ways to bridge the gap between your two positions. Remember, any good solution will address your needs and objectives, your friend's interests, and appear reasonable to a knowledgeable third party.

Here are some ideas to get you started. First, you get a certain amount of stock options and the opportunity to purchase a certain amount more at the same price as the founders or new investors when a new financing occurs. Your "payment" could even be discounted by the sweat equity you are putting into the firm. Or, maybe you agree to a certain stock option package now and gain additional stocks (through options or warrants) if you hit certain performance goals. Or maybe you forget about obtaining more options and instead negotiate for a higher salary (or frequent raises) when the company raises more money.