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  • August 1987 (Revised June 1989)
  • Background Note
  • HBS Case Collection

Note on Financial Contracting: ""Deals""

By: William A. Sahlman
  • Format:Print
  • | Pages:35 
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Abstract

Describes the issues involved in designing and evaluating financial contracts between users and suppliers of capital and between companies and employees. A simple conceptual framework is introduced and some critical issues addressed: 1) How is cash allocated? 2) How is risk allocated? and 3) What are the incentives for all parties in the deal? The emphasis in the note is on providing the reader with a set of questions that must be addressed when designing and evaluating any deals. Created for use in Entrepreneurial Finance. Can be used to provide general background reading or as an assignment for a day devoted to the discussion of deals.

Keywords

Contracts; Framework; Problems And Challenges; Corporate Finance

Citation

Sahlman, William A. Note on Financial Contracting: ""Deals"". Harvard Business School Background Note 288-014, August 1987. (Revised June 1989.)
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About The Author

William A. Sahlman

Entrepreneurial Management
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More from the Author
  • Guild Education: Unlocking Opportunity for America's Workforce By: William A. Sahlman, Michael D. Smith, Nicole Tempest Keller and Alpana Thapar
  • 1366 Technologies: Surviving in a Fast Changing World By: Jurgen Weiss, William A. Sahlman and Joseph B. Lassiter III
  • Khan Academy 2018 (Abridged) By: William A. Sahlman and Nicole Tempest Keller
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