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Discussion of the syllabus, course goals and structure.  

Slides for Class 1

Explanation of the simulation exercises, beginning with “find a lawyer” assignment.  All deliverables will be discussed in detail.  

1.  Find a Lawyer Assignment Description

2.  Stealth Networks, Inc. Fact Pattern

3.  Strategize with a Lawyer Simulation

4.  Negotiate with a Venture Capitalist Simulation

Slides for Class 2

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The Lawyer’s Perspective on Term Sheets & Early Stage Finance

• Guest: Mark Macenka, Partner & Vice-Chair of Business Practice Group at Testa,  Hurwitz & Thibeault.  

• All students should be in teams by the start of class on Tuesday, April 10.  Teams must be 3-4 people (no exceptions).

1.      Testa, “The Legal Process of Venture Capital Investment” (hardcopy handed out in class)

2.      Model term sheet

3.      The webpage www.tht.com (click on “private company or entrepreneur” and explore the information provided)

4.      “The Low Down on Start-Ups” by Jonathan D. Gworek, Morse, Barnes-Brown & Pendleton  

All of these items will be important reference materials for the entire course.  

Study Questions:

1.      What is the main role of lawyers in helping to raise early stage capital?

2.      What can you reasonably expect your lawyer to do?

3.      How much should you expect to pay for good legal advice?

4.      How has the legal environment changed in negotiating funding in the last 12 months?  

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Successfully Raising Money from VC

• Guest: Kristen Rauschenbach, Founder and CEO, PhotonEx  

• Start of class, Thursday, April 12: "Find a Lawyer" conclusions due.

Study Questions:

1.   How can you raise investment capital in this difficult funding environment?

2.   What is venture capital looking for today?  How can an entrepreneur convince potential investors?

3.   What are the key issues to think about in negotiating a term sheet?  

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April 18-May 2: Lawyer strategy sessions (see the syllabus for details)  

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Problems and Difficulties

• Guest: Ken Lownie, former CTO, GreenZebras  

Study Questions:

1.   What can go wrong when raising early stage capital?

2.   What are the warning signs to watch for?

3.   What kind of changes should you make when part of your fund raising strategy is not working out?  

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Seed Financing: Strategy for Getting to a Term Sheet

• Guest: Matt Westover, CEO, Storability [to be confirmed]  

Study Questions:

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?  

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Biotech Investing: Similarities and Differences

• Guest:  Jonathan Fleming, General Partner, Oxford Biosciences  

Review Oxford Bioscience model term sheet.

Study Questions:

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 sensibly negotiate to achieve in a biotech-related term sheet?  

April 30-May 10: Venture capitalist negotiation sessions 

(see the syllabus for details)

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• Guest:  Bob Greene, Managing Partner, Flatiron Partners  
• Lawyer strategy sessions must be completed and written up by May 2nd.

Flatiron Overview Presentation

Flatiron Sample Termsheet

Recent Article

Study Questions:

1.   What are the main concerns of venture capital investors in spring 2001?  How are these concerns affected by what is happening in their existing portfolio?

2.   How are these concerns manifested in the terms they offer?

3.   What can you reasonably expect to accomplish in a term sheet negotiation today?  

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Flouting Conventional Wisdom: Strategic Investors in the First Round

• Guest: Mara Aspinall, President, Genzyme Genetics

Study Questions:

1.   What are the advantages and disadvantages of strategic investors in general?

2.   When you should begin to talk with strategic investors?  What are the disadvantages of approaching them early in the investment process?

3.   What is the case in spring 2001 for involving strategic investors in the first round?  

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Trends in Valuation, from the VC’s Perspective

• Guest: Bill Frezza, General Partner, Adams Capital Management  

Study Questions:

1.   What is the latest VC view of valuation?

2.   What can you do or say to persuade a VC to change his or her mind about your valuation?

3.   What are the things you can do or say that will either have no effect or actually lower your valuation?  

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• VC negotiation sessions must be completed and written up by May 10th.

Study Questions:

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 your negotiations?

3.   What potential issues among team members are you now more aware of?  

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