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Management article
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Reference no. 87207
Published by: Harvard Business Publishing
Published in: "Harvard Business Review", 1987

Abstract

Business owners who have found venture capitalists (VCs) willing to put money into their companies may be tempted to take the money on any terms. Because they need the capital, the last thing they want to do is upset a deal. Owners don''t have to agree without negotiation to each provision the VCs want. Owners do have some leverage in the negotiations, particularly if their businesses already show a profit or if they are selling a highly desirable service or product.

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Abstract

Business owners who have found venture capitalists (VCs) willing to put money into their companies may be tempted to take the money on any terms. Because they need the capital, the last thing they want to do is upset a deal. Owners don''t have to agree without negotiation to each provision the VCs want. Owners do have some leverage in the negotiations, particularly if their businesses already show a profit or if they are selling a highly desirable service or product.

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