Students will work in teams (typically three or four people) on three discrete projects: - Find a lawyer. (10% of negotiation grade)
- Lawyer strategy round. (40% of negotiation grade)
- VC negotiation round. (50% of negotiation grade)
Explanations and written work products for each are given in the table below.
Note: To accommodate the professional participants' schedule, the simulation rounds take place during the week, usually in the evening. Students must be able to allocate ~2½ hours (including travel time) on two separate evenings.
| 1 | Introductory Class: Logistics | | | | Between 1 and 3 | | Find a lawyer
In this short, introductory exercise, teams will identify what kind of lawyer they want to hire for their new venture. Using practical resources, they will identify a shortlist of appropriate candidates. (10% of negotiation grade.)
Written Work Product:
A short memo summarizing investigation process, and justifying selection. | Find a Lawyer (PDF) | | 2 | Term Sheets 101 | Teams must be formed by end of class
You must provide the professor with a written list of team members and a team name before leaving class. Unaffiliated students will be randomly assigned to teams by me at that time. No one leaves class today without belonging to a team.
Teams should be three or four people, depending on course enrollment. Teams must sign up for lawyer and venture capitalist rounds by 8:00 pm tonight on the Sloan class server.
Sign up Procedures:
Teams should select its 1st, 2nd and 3rd choice slots for both rounds. Each slot can by selected by up to two teams.
When a slot is selected by more than one team, the slot will be assigned based on the rank of the selection or lottery, if necessary.
Principles of fair play and equity count, too. | | | 3 | Successfully Raising Money from VCs | "Find a lawyer" conclusions due, at the start of class | | | Between 3 and 7 | | Lawyer strategy sessions
Teams will assume the role of founders in a new firm and meet with practicing corporate lawyers at their offices. This simulation round is not an adversarial negotiation, but rather an exercise in using and managing outside advisers. Using a provided model term sheet, teams will formulate their legal and negotiating strategy for meeting with venture capitalists. (40% of negotiation grade.)
Sessions take place weekday evenings (or late afternoons) at law firms' offices. Each session: 1½-2 hours.
Written Work Product:
Teams will provide written agenda prior to meeting reflecting the team's priorities and goals for the meeting. Teams will provide written summary of meeting and evaluation of their effectiveness in the meeting. | Lawyer Simulation Round: Translate the Jargon, Build the Strategy (PDF)
MITunes, Inc.: Fact Packet for Simulations (PDF)
Sample Term Sheet (PDF)
| | 4 | Seed Financing: Strategy for Getting to a Term Sheet | | | | 5 | Sector Focus: Biotech | | | | 6 | Angel Financing:
2 Approaches | | | | 7 | Compare and Contrast Lawyer Rounds; Update on Deal Trends |
| | | Between 7 and 11 | | Venture capitalist negotiation sessions
Armed with insight from their lawyer round, teams will meet in a head-to-head negotiation with a local venture capitalist. The premise for this simulation is that the team is negotiating the final provisions that remain open between the team and the VC on their first round of venture financing. Leading Boston VC firms will be participating in the rounds. Teams will meet at the VCs' offices. (50% of negotiation grade.)
Sessions take place weekday evenings at VC firms' offices. Each session: 1½ hours.
Written Work Product:
Teams will provide written internal and external agendas prior to meeting reflecting the team's strategy, priorities and goals for the meeting. Following the meeting, teams will provide written summary of meeting and evaluation of their effectiveness and conclusions from the meeting. | Venture Capitalist Simulation Round: Negotiate the Deal, Build the Relationship (PDF) Sample Internal Strategic VC Agenda (PDF)
| | 8 | VC Negotiation: What Matters, What Works, What Doesn't | | | | 9 | Sector Focus:
Raising First Round Money in Biotech | | | | 10 | Going Global: Raising First Round Money for International Ventures | | | | 11 | Conclusions | Intra-team evaluation
Team members get to say who did the work. | Intra-team Evaluation (PDF) |
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