Venture Capital William B. Asher, Jr. Testa, Hurwitz & Thibeault, LLP Boston, MA 617 / 248-7000 asher@tht.com tht.com		What are some techniques to bridge a valuation gap in negotiations with venture capital investors? One way is to adjust pricing (e.g., by changing the conversion rate of convertible securities) if the company achieves financial or operational milestones, provided that they can be described precisely. Another method is to award management additional equity, via options or restricted stock, if milestones are achieved. Finally, for a later-stage company, investors may be willing to purchase common shares from stockholders at a discount from the price paid to the company for senior securities, resulting in a blended price.

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