PROGRAM ON NEGOTIATION AT HARVARD LAW SCHOOL

AN INTER-UNIVERSITY CONSORTIUM TO IMPROVE THE THEORY AND PRACTICE OF CONFLICT RESOLUTION

AEROSPACE INVESTMENT
BALANCING VENTURE & RELATIONSHIP CAPITAL

General Instructions for Both Parties

In this role simulation, you will negotiate the terms of a potential $100 million
investment by venture capital firm Aerovent Capital in the startup company Earth
Escape. This will be a balanced concerns negotiation. As defined by G. Richard Shell in
Bargaining for Advantage, 1 a negotiation involves balanced concerns if the immediate
substantive stakes and the future relationship are in balanced tension with each other.
Accordingly, each of you will be scored both on your ability to negotiate favorable
contract terms for yourself and on the quality of the relationship you develop with your
potential business partner.

Substantive Points: Each of you will be given confidential instructions explaining your
interests and preferences regarding the substantive terms of the investment, and their
corresponding point values. Point values for each term are unique to your role and are
based on your role’s personal, professional, and financial concerns. Do not share this
information until the entire exercise, including evaluations, has been completed.

Review Copy
Process Points: In addition to your substantive points, each of you also will receive
process points, based on your counterpart’s perception of your ability to develop and
maintain a positive relationship. After you have concluded the substantive negotiation,
but before you debrief the exercise, each of you will complete a brief process evaluation

Do Not Reproduce
in which you assess the degree to which your counterpart met five basic
process/relationship interests (such as trust) discussed in the confidential instructions, and
in which you award process points accordingly.

Your Total Score (Substantive Points + Process Points) reflects your overall success in
the negotiation. Your goal is to maximize your personal Total Score. Your Total Score
reflects the importance of balancing both substantive and relationship concerns. For
instance, you may be able to negotiate all the substantive terms in your favor, but if your
potential business partner has no desire to work with you again, you have left significant
value at the negotiating table, and this will be reflected in a lower Total Score.

1
Shell, G. Richard. Bargaining for Advantage: Negotiation Strategies for Reasonable People. New York:
Penguin Books, 2000.

This simulation was written by Nicholas Sabin, who gratefully acknowledges its genesis in Professor Edward Bergman's Negotiation
and Dispute Resolution course of the Wharton School's Department of Legal Studies and Business Ethics. Copies are available online
at www.pon.org, telephone: 800-258-4406 (within U.S.) or 781-239-1111 (outside U.S.); or by fax: 617-495-7818. This case may not
be reproduced, revised, or translated in whole or in part by any means without the written permission of the Director of Curriculum
Development, Program on Negotiation, Harvard Law School, 518 Pound Hall, Cambridge, MA 02138. Please help to preserve the
usefulness of this case by keeping it confidential. Copyright © 2007, 2010 by Nicholas E. Sabin. All rights reserved. Distributed with
permission. (Rev. 5/10)