Best Alternative To a Negotiated Agreement (“BATNA”)
What It Means
The phrase Best Alternative To a Negotiated Agreement, commonly referred to simply as BATNA, refers to the option that a party in a negotiation will take if no agreement can be reached between the negotiating parties.
Why It’s Important
Knowing your BATNA during during a negotiation is critical to having a well informed negotiation strategy. For a Seller, the BATNA may be another interested Buyer or it might be not selling the company at all. For a Buyer, the BATNA may be the purchase of another company or another type of investment completely. Understanding the other party’s BATNA in a negotiation is important to predicting the likelihood that they may accept certain terms or walk away from the deal.