This case concerns the negotiation of a venture capital investment between Charles River Ventures (CRV) and the founders of eDocs. eDocs (Kevin Laracey) and CRV (Jonathan Guerster) must decide what terms they would like to negotiate. Negotiation roles are given in an accompanying spreadsheet. Please review the study questions (page 2) and the poll questions (pages 3 and 4) – I will use these questions as a basis for class discussion. The point of the poll questions is to force people to think specifically about trading off deal terms for price, and to see how these tradeoffs vary across teams. Statistics from the poll results will be discussed in class.
In your case memo, please include a term sheet signed by one member of each team. Please make sure that the term sheets from both sides of the transaction match. It is not necessary to reproduce the entire term sheet for the case; instead, you can sign an “amended term sheet” that includes only the provisions that have changed from the original; please also include any amendments to the terms discussed in Guerster’s letter to Laracey (page 22 of the case). If the teams could not reach an agreement, please say this explicitly in your case memo. The memos should include all the answers to the “poll questions” for your team (pages 3 and 4) and some logical support for these answers. These poll questions are effectively the starred (*) questions for this memo. You are also free to answer/discuss any of the study questions (see page 2) or any other issues that were important in your negotiation. Grades on these memos will depend on the logical coherence of your negotiating strategy and answers to the poll questions (as described in the memo) and may depend on the relative success of your negotiation (judged vs. other teams). It is possible to negotiate against intransigent counterparties, come to no agreement, and yet explain this well and write an excellent case memo. Please restrict your memos to be no more...
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