| 1 | Introductory Class: Logistics | It is essential that all students thoroughly read prior to the first class:
1. Syllabus
2. Find a Lawyer Document
3. Lawyer Simulation Round Document
4. VC Simulation Round Document | |
| 2 | Term Sheets 101 | 1. Testa, Hurwitz and Thibeault, LLP's "user friendly" term sheet.
2. Trends in Legal Terms in Venture Financings in the San Francisco Bay Area (Second Quarter 2003). Fenwick & West LLP, 2003. Available at the web site of Fenwick & West LLP.
3. Explanation of Certain Terms Used in Venture Financing Terms Survey. Fenwick & West LLP, 2003. Available at the web site of Fenwick & West LLP. | |
| 3 | Successfully Raising Money from VCs | Explore EXIT41's web site; business plan extracts and press release about funding to be distributed in session 2.
Additionally, the following readings will not be explicitly discussed in class, but are important reference materials for class and simulation purposes:
1. Gworek, Jonathan D. "The Low Down on Start-Ups." Waltham, MA: Morse, Barnes-Brown & Pendleton, P.C. 2000. Available at the web site of Morse, Barnes-Brown & Pendleton, P.C.
2. Miller, Jr., Edwin L., Peter N. Barnes-Brown, and Jeffrey P. Steele. "Venture Capital Financings of Technology Companies." Waltham, MA: Morse, Barnes-Brown & Pendleton, P.C. 2002. Available at the web site of Morse, Barnes-Brown & Pendleton, P.C.
3. Trends in multiple liquation preferences:
Henig, Peter. "Fair Game: Extortion-Style Funding Dies an Early (and Timely) Death." Red Herring, 6 September 2002. Available at Red Herring. | 1. How can you raise investment capital in this difficult funding environment?
2. What are venture capitalists looking for today? How can an entrepreneur convince potential investors?
3. What are the key issues to think about in successfully negotiating a term sheet?
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| 4 | Seed Financing: Strategy for Getting to a Term Sheet | | 1. What does an entrepreneur need to do before even trying for a formal term sheet?
2. Who are the sources of seed financing and what are they looking for?
3. What are the advantages and disadvantages of pursuing seed money? |
| 5 | Sector Focus: Biotech | Weisman, Robert. "Post Peak: Q3 Venture Funding Levels Off." The Boston Globe, 10 November 2003, C1. Available at the web site of The Boston Globe.
Kerber, Ross. "Biotech Winners Show Investors Big Potential." The Boston Globe, 10 November 2003, C1. Available at the web Site of The Boston Globe.
GenPath Pharmaceuticals, Inc. "Company Profile." 2003. Available at the web site of GenPath Pharmaceuticals, Inc. | 1. How does raising money for a biotech firm differ from high tech?
2. What priorities should first time biotech entrepreneurs set in approaching A round funding negotiations?
3. What should biotech entrepreneurs look for in their VCs, in today's environment? |
| 6 | Angel Financing: 2 Approaches | Ewing Marion Kauffman Foundation. "Business Angel Investing Groups Growing in North America." October 2002. Available at the web site of the Kauffman Foundation. | 1. What are the primary advantages and disadvantages of seeking angel financing in 2003?
2. What are the priority considerations for entrepreneurs contemplating angel investors
3. How do later round VCs view angel investors?
4. How does angel investment differ from conventional first round funding, from a term sheet perspective? |
| 7 | Compare and Contrast Lawyer Rounds; Update on Deal Trends | | |
| 8 | VC Negotiation: What Matters, What Works, What Doesn't | Review web site of Kodiak Venture Partners and related links. | 1. With experience as both a successful entrepreneur and investor, how do you think strategically about VC negotiations?
2. What provisions in the term sheet do you consider most critical? Why?
3. What cues, verbal and nonverbal, do you look for or watch out for in your negotiations with entrepreneurs?
4. How do you balance pure valuation against the so-called non-financial provisions in term sheet negotiations? |
| 9 | Sector Focus:
Raising First Round Money in Biotech | Review web site of Oxford Bioscience Partners, Oxford term sheet template. | 1. What is different about raising capital for biotech?
2. How are these differences reflected in the term sheets initially offered in this industry?
3. What can you reasonably expect to achieve in a biotech-related term sheet?
4. Tuan Ha-Ngoc, the CEO for GenPath, has been a guest in our class. Oxford just invested in their last $40M round. How did you as the VC approach the financing negotiations? |
| 10 | Going Global: Raising First Round Money for International Ventures | Thoroughly review the web site of 3i and links related to international investment. | 1. What are the primary pitfalls -- economic, cultural, legal and otherwise -- that derail entrepreneurs seeking early stage international VC investment, and how can they best be avoided?
2. How does the evaluation process for new ventures differ in VC firms that invest internationally?
3. From a term sheet perspective, what are the unique considerations involved in negotiating such an investment? |
| 11 | Conclusions | Review the most important materials from previous classes. | 1. What have you learned from this course (distinguish between class sessions and the negotiation simulations)?
2. What were the most serious mistakes you made in our negotiations?
3. What potential issues among team members are you now more aware of? |