Use a deal diagram shape template to capture details

In both my past as a corporate lawyer and as a strategic advisor, I often find myself drawing deal diagrams for a variety of parties. Even among those familiar with deal diagrams, I have not found any great uniformity in the choice of shapes; most people go with rectangles all around. However, having been in a military intelligence position as my first job at my first unit in the Army, I’m inordinately fond of more detailed diagrams and symbols. It therefore occurred to me that much like Prof. Tufte suggests making presentations more data-dense, we could improve our diagrams by encoding more information in the diagram itself to increase its value in a conversation about any specific deal.

I am interested in finding out whether anyone has made an effort to create a reasonable standard lexicon for corporate deal diagrams. My own list of requirements/wish list is here:

  1. Corporate entity types
    1. C corps – we’ve used rectangles to represent corporations, with a V shape inscribed for a C-corp.
    2. S corps – we’ve used a rectangle with an inverted V inscribed for an S-corp.
    3. LLC – we’ve generally used a point-up triangle for an LLC
    4. LP – same point-up triangle as for the LLC
    5. GP – a point-down triangle
    6. Sole proprietorship/Individual – a circle
  2. Ownership lines with % marked
  3. governance relations
    1. board of directors
    2. stockholder
    3. member
    4. managing member
    5. limited partner
    6. general partner
  4. Deal lines
    1. stock
    2. cash
    3. stuff (goods)
    4. license, right, or option
    5. tax benefits, income, & capital gains for, e.g., RE deals
    6. debt

We’ll look for some digrams that we can sanitize to use as examples, for a later post.

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  1. […] tool — it looks like a good idea for some deskside briefs that I give often, such as deal structures for startup financing or other transactions. This entry was posted in Uncategorized. Bookmark the […]

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