FlexShyft: Term Sheet Negotiation

Description

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.

Learning Objective

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.

Keywords

Financing Negotiation term sheet Venture capital