Margaret

http://businesseshome.net

1) There is nothing that will give an entrepreneur more leverage in connection with any deal negotiation than a competitive environment (or the perception of same). Indeed, every investment banker worth his salt understands this simple proposition. Not only does competition validate the other parties' interest, but also it appeals to the human nature of the individuals involved. Competitors can be played-off of each other and, as a result, the entrepreneur will be able to strike the best possible deal. As you point out, however, this strategy must be played very carefully and is better-handled by someone with strong experience.

2) As noted in the comments, an entrepreneur should NEVER sign a term sheet (or indeed any piece of paper) prior to its review by an experienced attorney. Yes, it is imperative that entrepreneurs understand all of the terms and provisions of the term sheet (and become an “expert”); however, the term sheet still must be vetted by an experienced attorney to ensure that the entrepreneur is protected (and hasn’t missed anything). This may sound a bit self-serving — but entrepreneurs trying to play lawyer (particularly with all the forms on the web) is probably the number mistake that I see on regular basis.

Thank you – and keep up the good work. (Btw, I’m launching a new site and a blog next week to help entrepreneurs from the legal side.)

Scott Edward Walker
Walker Corporate Law Group, PLLC