What’s the best way to negotiate with an investor?

Y Combinator (a startup accelerator based in Mountain View, CA.)
The Handshake Deal Protocol

Silicon Valley runs on handshake deals. A handshake deal is a verbal commitment to a transaction. The actual transaction comes later, when documents are signed and money changes hands. Why do we need handshake deals? Why not just wait till the actual transaction? Because things can happen fast in the startup world.