[fleaflicker]

I struggled with this too. Just be honest--don't hide anything and don't pretend to be something you're not. If you sell they'll find out anyway.

Negotiating is all about the ability to walk away. Focus on your product. If a sale doesn't happen you shouldn't be crushed. Just continue growing as you planned.

[enjo]

+1. On more than one occasion I've seen startups flounder around during acquisition negotitions without actually pushing forward. 6 months later they're in trouble. I've even seen big companies use these negotiations as a stalling tactic.

Don't let it happen. Keep your foot on the gas, and make them put-up or shut-up. Get a letter of intent straight away. Due diligence isn't an excuse to stall. Negotiate a schedule and stick to it. If they can't meet their end (without obvious good reasons) forget it and move on.