Foreword |
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xi | |
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Foreword |
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xiii | |
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Foreword |
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xv | |
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Preface |
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xvii | |
Acknowledgments |
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xxiii | |
Introduction: The Art of the Term Sheet |
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1 | (2) |
Chapter 1 The Players |
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3 | (14) |
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3 | (1) |
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4 | (3) |
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Financing Round Nomenclature |
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7 | (2) |
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Types of Venture Capital Firms |
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9 | (1) |
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10 | (2) |
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12 | (1) |
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13 | (1) |
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14 | (1) |
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15 | (1) |
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15 | (2) |
Chapter 2 Preparing for Fundraising |
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17 | (6) |
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Choosing the Right Lawyer |
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17 | (1) |
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Proactive versus Reactive |
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18 | (2) |
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20 | (3) |
Chapter 3 How to Raise Money |
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23 | (18) |
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"Do. Or Do Not. There Is No Try." |
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23 | (1) |
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Determine How Much You Are Raising |
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24 | (2) |
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26 | (6) |
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32 | (1) |
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33 | (1) |
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34 | (1) |
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35 | (3) |
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Using Multiple VCs to Create Competition |
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38 | (1) |
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39 | (2) |
Chapter 4 Overview of the Term Sheet |
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41 | (4) |
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The Key Concepts: Economics and Control |
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42 | (3) |
Chapter 5 Economic Terms of the Term Sheet |
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45 | (32) |
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45 | (2) |
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47 | (3) |
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50 | (2) |
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How Valuation Is Determined |
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52 | (2) |
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54 | (9) |
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63 | (3) |
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66 | (4) |
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70 | (1) |
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71 | (6) |
Chapter 6 Control Terms of the Term Sheet |
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77 | (14) |
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77 | (4) |
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81 | (4) |
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85 | (3) |
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88 | (3) |
Chapter 7 Other Terms of the Term Sheet |
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91 | (22) |
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91 | (2) |
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93 | (2) |
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Conditions Precedent to Financing |
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95 | (2) |
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97 | (1) |
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98 | (2) |
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100 | (2) |
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102 | (1) |
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102 | (1) |
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Proprietary Information and Inventions Agreement |
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103 | (1) |
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104 | (1) |
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105 | (1) |
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Initial Public Offering Shares Purchase |
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106 | (1) |
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107 | (3) |
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110 | (1) |
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110 | (3) |
Chapter 8 Convertible Debt |
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113 | (16) |
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Arguments for and Against Convertible Debt |
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114 | (2) |
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116 | (1) |
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117 | (2) |
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119 | (1) |
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119 | (2) |
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Conversion in a Sale of the Company |
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121 | (1) |
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122 | (3) |
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125 | (1) |
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Early Stage versus Late Stage Dynamics |
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125 | (1) |
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Can Convertible Debt Be Dangerous? |
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126 | (1) |
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An Alternative to Convertible Debt |
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127 | (2) |
Chapter 9 The Capitalization Table |
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129 | (8) |
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Price per Share with Convertible Notes |
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131 | (1) |
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132 | (1) |
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Percentage-Ownership Method |
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133 | (1) |
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133 | (4) |
Chapter 10 Crowdfunding |
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137 | (8) |
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137 | (2) |
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139 | (2) |
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How Equity Crowdfunding Differs |
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141 | (2) |
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143 | (2) |
Chapter 11 Venture Debt |
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145 | (22) |
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The Role of Debt versus Equity |
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145 | (2) |
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147 | (1) |
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How Lenders Think about Loan Types |
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148 | (3) |
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151 | (3) |
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154 | (3) |
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157 | (4) |
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161 | (2) |
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163 | (4) |
Chapter 12 How Venture Capital Funds Work |
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167 | (20) |
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Overview of a Typical Structure |
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168 | (1) |
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169 | (2) |
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How Venture Capitalists Make Money |
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171 | (4) |
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How Time Impacts Fund Activity |
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175 | (2) |
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177 | (2) |
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179 | (1) |
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179 | (2) |
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181 | (1) |
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Corporate Venture Capital |
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181 | (2) |
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183 | (1) |
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184 | (1) |
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Implications for the Entrepreneur |
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185 | (2) |
Chapter 13 Negotiation Tactics |
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187 | (22) |
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187 | (1) |
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Preparing for the Negotiation |
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188 | (3) |
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A Brief Introduction to Game Theory |
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191 | (2) |
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Negotiating in the Game of Financings |
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193 | (1) |
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194 | (1) |
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Negotiating Styles and Approaches |
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195 | (4) |
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Collaborative Negotiation versus Walk-Away Threats |
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199 | (1) |
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Building Leverage and Getting to Yes |
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200 | (3) |
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203 | (2) |
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Great Lawyers versus Bad Lawyers versus No Lawyers |
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205 | (1) |
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Can You Make a Bad Deal Better? |
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206 | (3) |
Chapter 14 Raising Money the Right Way |
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209 | (6) |
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209 | (1) |
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Don't Ask for a Nondisclosure Agreement |
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210 | (1) |
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Don't Email Carpet-Bomb VCs |
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210 | (1) |
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211 | (1) |
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Don't Ask for a Referral If You Get a No |
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211 | (1) |
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212 | (1) |
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Don't Overemphasize Patents |
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213 | (1) |
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Don't Be Silent If You Witness Bad Behavior |
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213 | (2) |
Chapter 15 Issues at Different Financing Stages |
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215 | (6) |
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215 | (1) |
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216 | (1) |
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217 | (4) |
Chapter 16 Letters of Intent: The Other Term Sheet |
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221 | (22) |
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222 | (3) |
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Asset Deal versus Stock Deal |
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225 | (2) |
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227 | (1) |
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Assumption of Stock Options |
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228 | (4) |
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Representations, Warranties, and Indemnification |
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232 | (1) |
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233 | (2) |
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Confidentiality/Nondisclosure Agreement |
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235 | (1) |
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236 | (1) |
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237 | (1) |
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238 | (1) |
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Fees, Fees, and More Fees |
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239 | (1) |
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240 | (1) |
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Shareholder Representatives |
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241 | (2) |
Chapter 17 How to Engage an Investment Banker |
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243 | (10) |
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Why Hire an Investment Banker? |
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243 | (2) |
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How to Choose an M&A Adviser |
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245 | (2) |
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Negotiating the Engagement Letter |
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247 | (4) |
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Helping Your Banker Maximize the Outcome |
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251 | (2) |
Chapter 18 Why Do Term Sheets Even Exist? |
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253 | (6) |
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Constraining Behavior and the Alignment of Incentives |
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254 | (1) |
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255 | (1) |
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Agency Costs and Information Asymmetry |
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256 | (1) |
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257 | (2) |
Chapter 19 Legal Things Every Entrepreneur Should Know |
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259 | (14) |
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259 | (2) |
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261 | (1) |
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262 | (1) |
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263 | (1) |
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Type of Corporate Structure |
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264 | (1) |
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265 | (1) |
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266 | (1) |
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267 | (1) |
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268 | (1) |
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Consultants versus Employees |
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269 | (1) |
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Compensating Service Providers |
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270 | (3) |
Authors' Note |
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273 | (2) |
Appendix A: Sample Term Sheet |
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275 | (10) |
Appendix B: Foundry Group Term Sheet |
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285 | (10) |
Appendix C: Sample Letter of Intent |
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295 | (8) |
Appendix D: Additional Resources |
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303 | (4) |
Glossary |
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307 | (14) |
About the Authors |
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321 | (2) |
Index |
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323 | (10) |
Excerpt from Startup Communities |
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333 | |