Chapter 8. Negotiating the Deal and Commitment Letter

In this chapter, we explore how to calculate your risk and return, how to structure deals, and what to put in the commitment letter. You need to know what risks you are taking and what the expected return will be. It’s important to structure a deal to your advantage and to spell it out in business terms so that your lawyer can put it into legal terms.

Pricing the Deal

Pricing a deal is one of the investor’s most difficult tasks. There are dozens of different critical aspects to pricing, and this chapter touches on some of them.

Risk/Reward

The greater the risk, the greater the reward—supposedly, but how do you identify and define risk? And how do you quantify risk? What is the probability that ...

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