Venture capital contracts give VCs enormous power over entrepreneurs and early equity investors of portfolio companies. A large literature examines how these contractual terms protect VCs against misbehavior by entrepreneurs. But what constrains misbehavior by VCs? We provide the first...

This paper studies 1,655 venture investments in public equity (“VIPEs”) over 1995-2008. Although it has been conjectured that venture capital firms (VCs) have increased investments in public equity over time, we find little evidence to support this claim as VIPEs represent less than 2...