<p>Lecture, three hours. Enrollment by consent of instructor. Introduction to economic and legal issues to consider when starting a business. Consideration of economic issues that arise from ideation until the first term sheet is presented to, and negotiated with, initial investors. Includes negotiation simulations to teach negotiation skills and uniqueness of valuing different terms. Review of fact patterns of successful companies that had some initial setbacks. Examination of different agreements, filings, and steps one can take to protect economic interests of an early stage venture. Addresses potential issues arising from adverse selection, moral hazard, and hold-up problems. Recognizing these economic foundations allows students to move beyond reading contracts as collections of legal terms and instead understand them as carefully designed mechanisms that enable mutually beneficial exchange in the presence of informational and contractual frictions. P/NP or letter grading.</p>

Economics

College of Letters and Science

ECON 172 - Economic and Legal Issues for Startups

Economic and Legal Issues for Startups

Understand what a stock option is and how their value changes over time. 

Understand the basic parameters of an offer letter.

Spot issues and fact patterns that can be addressed when working on an idea for a company and how to protect that idea.
 


Appreciate the many paths to take in a business negotiation.

Understand and consider different intellectual property issues that may need to be evaluated in a business. 

 Understand the basic parameters and contours of an early stage term sheet between a company and an investor
 


Understand the different ways to negotiate a term sheet. 

Read and understand basic confidentiality agreements and understand key provisions

General Catalog

Economic and Legal Issues for Startups

ECON 172

4 units