Venture Capital and Private Equity Contracting book cover

Venture Capital and Private Equity Contracting

An International Perspective

Other books present corporate finance approaches to the venture capital and private equity industry, but many key decisions require an understanding of the ways that law and economics work together. This revised and updated 2e offers broad perspectives and principles not found in other course books, enabling readers to deduce the economic implications of specific contract terms. This approach avoids the common pitfalls of implying that contractual terms apply equally to firms in any industry anywhere in the world.

In the 2e, datasets from over 40 countries are used to analyze and consider limited partnership contracts, compensation agreements, and differences in the structure of limited partnership venture capital funds, corporate venture capital funds, and government venture capital funds. There is also an in-depth study of contracts between different types of venture capital funds and entrepreneurial firms, including security design, and detailed cash flow, control and veto rights. The implications of such contracts for value-added effort and for performance are examined with reference to data from an international perspective. With seven new or completely revised chapters covering a range of topics from Fund Size and Diseconomies of Scale to Fundraising and Regulation, this new edition will be essential for financial and legal students and researchers considering international venture capital and private equity.

Audience

Undergraduates and graduate students of economics, law and business interested in studying financial and legal aspects of venture capital and private equity

Hardbound, 780 Pages

Published: August 2013

Imprint: Elsevier

ISBN: 978-0-12-409537-3

Contents

  • Part I. Introduction
    1. Introduction and Overview
    2. Agency Costs and Forms of Finance
    3. Overview of Institutional Contexts and Empirical Methods

    Part II. Fund Structure and Governance
    4. Fundraising
    5. Limited Partnership Agreements
    6. Compensation Contracts
    7. Specialized Investment Mandates
    8. Style Drift
    9. The Role of Government and Alternative Policy Options

    Part III. Financial Contracting between Funds and Entrepreneurs
    10. The Investment Process
    11. Security Design
    12. Preplanned Exits and Contract Design
    13. Legal Conditions and Venture Capital Governance

    Part IV. Investor Effort
    14. Investor value-added
    15. Contracts and effort
    16. Local Bias
    17. Portfolio Size
    18. Fund Size

    Part V. Divestment
    19. The Divestment Process
    20. Investment Duration
    21. Contracts and Exits
    22. Returns, Valuation and Disclosure

    Part VI. Conclusion and Appendices
    23. Summary and Concluding Remarks

    Online Appendices
    Appendix 1: Sample Limited Partnership Fund Agreement
    Appendix 2: Sample Term Sheet
    Appendix 3: Sample Shareholder Agreement
    Appendix 4: Sample Subscription Agreement

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