< Scenario Catalogue

VC Term Sheet Negotiation

Scenario Image
Topics
Entrepreneurship and Innovation
Negotiations


Industries
ALL
Finance
Approximate Length
60 minutes
A venture capital fund is eager to invest in your startup. Negotiate face-to-face with Bertrand Drannoc, a seasoned VC fund manager. Explore the complex details of closing a Private Equity/VC term sheet. Sharpen your negotiation skills in a simulation preparing you for real-life business encounters with investors.

This role play simulation is designed to provide a realistic and engaging learning experience for entrepreneurs about negotiating a venture capital investment term sheet. In this simulation, participants step into the shoes of Alex Bailey, a co-founder of "Very Good AI," a company specializing in Software as a Service (SaaS) AI applications for businesses. The opposing party is Dratlink Capital, a substantial $900 million venture capital fund managed by Bertrand Drannoc, with legal advice provided by Vanessa Chow from the law firm Chow, Singh and Bennett.

The simulation begins with an introduction to the scenario where Dratlink Capital has shown interest in investing in "Very Good AI" and has sent a term sheet for review. Alex Bailey’s objective is to negotiate the best possible deal with Dratlink Capital, balancing the need for investment with the interests and future growth of their company.

Participants will first review the proposed term sheet, which can be downloaded from a provided link. They then consult with their lawyer, Vanessa Chow, to prepare thoroughly for the negotiation process. The simulation allows for dynamic interaction; participants can continually consult their lawyer to seek advice during negotiations with Bertrand Drannoc, the managing partner of Dratlink Capital.

The main challenge of the simulation is to achieve the most favorable terms while being prepared to make compromises. This reflects the real tensions in venture capital negotiations, where both parties are motivated to reach an agreement but also have their specific interests to protect.

This engaging role play is not only a practical exercise in understanding and negotiating VC term sheets but also provides insights into the strategic considerations and interpersonal dynamics that are crucial in real-world business negotiations.