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Bengtsson, Ola - In: Management Science 57 (2011) 11, pp. 1926-1943

This paper studies how covenants are included in contracts between venture capitalists (VCs) and entrepreneurs. I show that VCs hold covenanted veto rights even though they are shareholders who have access to other powerful governance solutions. Unlike bank loans and bonds, venture capital (VC)...

Persistent link: https://www.econbiz.de/10010990553

How Do Legal Differences and Learning Affect Financial Contracts?

Kaplan, Steven N.; Martel, Frederic; Strömberg, Per - Institute for Financial Research (SIFR) - 2004

We analyze venture capital (VC) investments in twenty-three non-U.S. countries and compare them to U.S. VC investments. We describe how the contracts allocate cash flow, board, liquidation, and other control rights. In univariate analyses, contracts differ across legal regimes. However, more...

Persistent link: https://www.econbiz.de/10005207219

Private Information and Bargaining Power in Venture Capital Financing

Koskinen, Yrjo; Rebello, Michael J.; Wang, Jun - Institute for Financial Research (SIFR) - 2006

We examine how the relative bargaining power of privately informed venture capitalists and entrepreneurs - determined either by market conditions or by prior experience - affects both the willingness of venture capitalists to invest and the terms of their financing contracts. Our results...

Persistent link: https://www.econbiz.de/10005207227

Venture Capital Financing: The Role of Bargaining Power and the Evolution of Informational Asymmetry

Koskinen, Yrjö; Rebello, Michael; Wang, Jun - C.E.P.R. Discussion Papers - 2006

We model a situation where the entrepreneur has an informational advantage during the early stages of an investment project while the venture capitalist has the informational advantage during the later stages. We examine how this evolution of informational asymmetry affects venture investment...

Persistent link: https://www.econbiz.de/10005067345

Advice and Monitoring: Venture Financing with Multiple Tasks

Schindele, Ibolya - Institute for Financial Research (SIFR) - 2004

prefer to contract with a multitask financier rather than with an advisor and a monitor separately. This provides one …

Persistent link: https://www.econbiz.de/10005651573

Staged investments in entrepreneurial financing

Dahiya, Sandeep; Ray, Korok - In: Journal of Corporate Finance 18 (2012) 5, pp. 1193-1216

Venture capitalists deliver investments to entrepreneurs in stages. This paper shows staged financing is efficient. Staging lets investors abandon ventures with low early returns, and thus sorts good projects from bad. The primary implication from staging is that it is efficient to invest more...

Persistent link: https://www.econbiz.de/10010588368

Investor Affiliation, Experience and Venture Capital Financial Contracts.

Joly, Vanessa - Université Paris-Dauphine

This paper explores the relationship between venture capitalists (VCs)’ financial contracts and the characteristics of these VCs. Analyzing VCs' responses to our questionnaire, we find that VCs’ contractual behaviors differ according to affiliation and experience. VCs working for independent...

Persistent link: https://www.econbiz.de/10008917388

Investor Affiliation, Experience and Venture Capital Financial Contracts

Joly, Vanessa - Université Paris-Dauphine (Paris IX) - 2010

Persistent link: https://www.econbiz.de/10011073471

Debt Financing of High-growth Startups

Fischer, Timo; Rassenfosse, Gaétan de - DRUID, Copenhagen Business School, Department of … - 2011

We study the business model of venture debt firms, specialized institutions that provide loans to high-growth startups …. Venture debt represents an apparent contradiction with traditional debt theory since startups have negative cash flows and … venture capital firms substitutes for startups’ cash flow. Furthermore, we illustrate the signaling effect of patents and …

Persistent link: https://www.econbiz.de/10009353888

National institutions and high tech industries: A varieties of capitalism perspective on the failure of Germany's Neuer Markt

Vitols, Sigurt; Engelhardt, Lutz - Wissenschaftszentrum Berlin für Sozialforschung (WZB) - 2005

One of the more prominent recent failures in institutional innovation in Germany was the Neuer Markt (1997-2003), a … market for mid-career scientists and managers remains quite low, making it difficult for startups to attract the experienced …Einer der letzten bedeutenden Fehlschläge bezüglich institutioneller Innovation in Deutschland war der Neue Markt (1997 …

Persistent link: https://www.econbiz.de/10009367951

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