Background Note | HBS Case Collection | October 1999 (Revised March 2000)

Venture Capital Negotiations: VC versus Entrepreneur

by Robert J. Robinson and Noam T. Wasserman

Abstract

Introduces students to the challenging negotiations between venture capitalists and entrepreneurs. Explores interests, sources of negotiating power, barriers to reaching agreement, and common contractual terms. Describes how the parties try to reduce information asymmetries, align incentives, control decision making, and protect financial downside.

Keywords: Negotiation Tactics; Venture Capital; Entrepreneurship; Financial Services Industry;

Citation:

Robinson, Robert J., and Noam T. Wasserman. "Venture Capital Negotiations: VC versus Entrepreneur." Harvard Business School Background Note 800-170, October 1999. (Revised March 2000.) (2000.)