Deal Structure Sketch

Write down what each side brings and wants, how money moves and when, who carries the downside, who decides and how either side gets out, then test the structure against an alternative and your own walk-away point.

Creating and claiming value is an established idea in negotiation research with mixed evidence (Lax & Sebenius, 1986). Best alternatives and the bargaining zone are influential but mixed: experiments show that a weak alternative can anchor you low and that your read of the zone is skewed (Fisher & Ury, 1981; Raiffa, 1982; Schaerer, Loschelder & Swaab, 2016). The acquisition evidence is consulting practice (BCG, 2025; Bain, 2026). The archetypes, checklists and risk shapes on this page are practice, not research.

Use it when:

• A partner, client or supplier proposes a deal and you want to see its economics and risks before you answer.
• You are choosing between a fixed fee, a revenue share, a license or a performance fee and need to compare them on the same page.
• A draft contract has arrived and you want your own view of the structure before you read their clauses.

Skip it when:

• The structure is settled and you are preparing the conversation itself: use 5.11 Negotiation Prep Sheet.
• You first need to know what the other parties are paid for and how they behave: use 5.2 Stakeholders & Incentives.

Every deal does two things at once: it creates value that neither side could reach alone, and it splits that value between them. A negotiator who works on only one of these loses on the other (Lax & Sebenius, 1986). The well-known advice is to bargain over interests, not positions, and to know your best alternative before you sit down (Fisher & Ury, 1981). Its evidence is mixed. A weak alternative can pull your own demands down, and your estimate of the zone between the two sides' limits is shaped by the alternatives you hold, so treat that zone as a guess to update (Raiffa, 1982). For acquisitions, firm reports point the same way: practiced, repeated dealmaking goes with better results, and the rare large deal by an occasional buyer is the riskiest pattern. Those data are correlational and self-selected (McKinsey, 2026; BCG, 2025; Bain, 2026).

That is why Step 1 asks for interests on both sides, Step 3 forces a downside case, and Step 5 tests the structure against an alternative and your walk-away point.

Positions are what each side asks for. Interests are why. If you cannot fill in their column from something they said or did, ask before you design anything.

Strong answer: "They bring a sales force that visits 400 stores (illustrative); they want a product line that fills a gap before the spring catalog and no upfront cost. We bring the product and the brand; we want shelf presence in a region we cannot reach and at least our standard margin." Not: "They want a good price."

Type of deal (client or project contract, partnership, revenue share, license, supplier agreement, equity, other):

Who decides on each side (by role):

Illustrative example: the businesses and all numbers are made up.

A small rye-bread bakery in Tampere, Finland, is offered a deal by a regional grocery wholesaler.

Step 1: the wholesaler brings 60 stores and a delivery route; it wants a local product for its "made nearby" shelf and no upfront cost. The bakery wants shelf space outside the city without hiring a sales rep.

Step 2: the wholesaler proposes 25 percent of net store sales to the bakery after its own margin, paid 45 days after each month. The bakery defines net sales as sales less returns and VAT, with a quarterly statement and audit rights. Expected gross margin: 31 percent against the usual 38.

Step 3: worst case: half the stores reorder rarely and the bakery bakes for orders that do not come. The bakery carries production risk alone. It asks for a fixed weekly minimum per store.

Step 4: the wholesaler sets shelf placement; price changes need both. Two-year term, three months' notice after year one.

Step 5: alternative: a straight wholesale price with no share. Simpler, but the bakery would see no store data. Decision: proceed if the weekly minimum is accepted; owner: the founder, before the wholesaler's spring range meeting.