What Do Economists Tell Us About Venture Capital Contracts?

Item Type Journal paper
Abstract

© 2007 The Author Journal compilation © 2007 Blackwell Publishing Ltd. Venture capital markets are characterized by multiple incentive problems and asymmetric information. Entrepreneurs and venture capitalists enter into contracts that influence their behaviour and mitigate the agency costs. In particular, they select an appropriate kind and structure of financing and specify the rights as well as the duties of both parties. The typical features of venture capital investments are an intensive screening and evaluation process, active involvement of venture capitalists in their portfolio companies, staging of capital infusions, use of special financing instruments such as convertible debt or convertible preferred stock, syndication among venture capitalists or limited investment horizon.

Authors Tykvova, Tereza
Journal or Publication Title Journal of Economic Surveys
Language English
Subjects business studies
economics
finance
HSG Classification contribution to scientific community
HSG Profile Area SOF - System-wide Risk in the Financial System
Refereed Yes
Date 2007
Volume 21(1)
Page Range 65-89
Number of Pages 24
Publisher DOI 10.1111/j.1467-6419.2007.00272.x
Depositing User Diky Seematter-Yardong
Date Deposited 25 Feb 2020 11:06
Last Modified 03 Mar 2020 14:04
URI: https://www.alexandria.unisg.ch/publications/259436

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Citation

Tykvova, Tereza (2007) What Do Economists Tell Us About Venture Capital Contracts? Journal of Economic Surveys, 21(1) 65-89.

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https://www.alexandria.unisg.ch/id/eprint/259436
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