Conditional Allocation of Control Rights in Venture Capital Finance
نویسندگان
چکیده
منابع مشابه
The allocation of control rights in venture capital contracts
Venture capitalists often hold extensive control rights over entrepreneurial companies, including the right to fire entrepreneurs. This paper examines why, and under what circumstances, entrepreneurs would voluntarily relinquish control. Control rights protect the venture capitalists from hold-up by the entrepreneurs. This provides the correct incentives for the venture capitalists to search fo...
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In view of the allocation of cash flow rights and control rights in venture capital firms, a financing contract model is set up by introducing the entrepreneur’s self-owned capital in this paper. This paper analyzes the affecting factors and mechanism to the allocation of cash flow rights and control rights, shows the relationship between cash flow rights and control rights, gives the bargain i...
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Often entrepreneurs and investors agree to governance mechanisms that resemble joint control – neither agent has dominant control of the firm, and corporate decisions unspecified in the initial contract are made only with the approval of both agents. This contradicts theoretical predictions that joint control is suboptimal, except under some limited circumstances. I develop a theoretical model ...
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We analyze how entrepreneurial firms choose between two funding institution: banks, which monitor less intensively and face liquidity demands from their own investors, and venture capitalists, who can monitor more intensively but face a higher cost of capital because of the liquidity constraints that they impose on their own investors. Because the firm’s manager prefers continuing the firm over...
متن کاملTrends in Venture Capital Finance in Developing Countries
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2006
ISSN: 1556-5068
DOI: 10.2139/ssrn.911527