FlexShyft: Term Sheet Negotiation (A)

Name: FlexShyft: Term Sheet Negotiation (A) (English version)
SKU: E-774A

Siegel, Robert; Beyer, Anne; Mirabile, Dominic

Product #:E-774A

Supplier:Stanford University

Discipline:Finance

Setting:United States

Details:Role-Play (PDF) • 13 pages • 2022-03-31

Subjects:

Entrepreneurship Financial negotiations Financing Venture capital Finance and investing Corporate finance Investment management Personal finance

Geography:

United States North America

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$9.71

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This case describes a fictional company, FlexShyft, as its cofounders navigate and negotiate the terms of an offer to invest in the company's Series B financing round. The cofounders review and evaluate each clause of the term sheet from the venture capital firm Storm Point Ventures to understand the implications for the company, FlexShyft's existing investors, and themselves. The case is designed to be taught as a simulated negotiation, in which students are split into two groups and asked to either roleplay as investors from Storm Point or FlexShyft cofounders. Students in both groups will be given additional information - the B1 or B2 case - and be asked to negotiate the terms to arrive at a deal.

This is a Role-play case for experiential teaching and classroom engagement.

Learning Objectives

Students will gain a better understanding of the terms commonly included in venture capital financing agreements, as well as the interests of both entrepreneurs and venture capitalists in a term sheet negotiation. They will also engage in experiential learning through a simulated negotiation and practice the how to prioritize their objectives, raise conflict constructively, and arrive at a mutually beneficial deal.