Venture Capital and Private Equity Contracting

Venture Capital and Private Equity Contracting

An International Perspective

1st Edition - January 21, 2009

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  • Authors: Douglas Cumming, Sofia Johan
  • eBook ISBN: 9780080917542

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Description

Other books present corporate finance approaches to the VC/PE industry, but many key decisions require an understanding of the ways that law and economics work together. Venture Capital and Private Equity Contracting is better than straight corporate finance textbooks because it offers broad perspectives and principles that enable 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.

Key Features

  • Explores the economic implications of contract terms for start-up firms in various industries
  • Pairs international data with explanations and examples about differences in VC and PE national and regional markets
  • Contains sample contracts, including limited partnership agreements, term sheets, shareholder agreements, and subscription agreements
  • Presents international datasets on limited partnership agreements between institutional investors and VC and PE funds

Readership

Upper-division undergraduates and graduate students studying financial and legal aspects of venture capital and private equity

Table of Contents

  • Preface

    Part I. Introduction
    1. Introduction and Overview
    2. Agency Costs and Forms of Finance

    Part II. Fund Structure and Governance
    3. What Should Fund Managers Care About? Perspectives from Institutional Investors
    4. Limited Partnership Agreements
    5. Compensation Contracts
    6. Fundraising and Regulation
    7. Specialized Investment Mandates
    8. The Role of Government and Alternative Policy Options

    Part III. Financial Contracting between Funds and Entrepreneurs
    9. The Investment Process
    10. Security Design
    11. Security Design and Adverse Selection
    12. Corporate Venture Capital Fund Contracts
    13. Preplanned Exits and Contract Design

    Part IV. Investor Effort
    14. Investor value-added
    15. Do contracts affect effort?
    16. Where to invest?
    17. How many investee firms?

    Part V. Divestment
    18. The Divestment Process
    19. Exit Outcomes
    20. Contracts and Exits
    21. Returns, Valuation and Disclosure

    Part VI. Conclusion and Appendices
    22. Summary and Concluding Remarks
    Appendix 1: Sample Limited Partnership Fund Agreement
    Appendix 2: Sample Term Sheet
    Appendix 3: Sample Shareholder Agreement
    Appendix 4: Sample Subscription Agreement

    Index

Product details

  • No. of pages: 792
  • Language: English
  • Copyright: © Academic Press 2009
  • Published: January 21, 2009
  • Imprint: Academic Press
  • eBook ISBN: 9780080917542

About the Authors

Douglas Cumming

Douglas Cumming
Douglas Cumming, J.D., Ph.D., CFA, is the DeSantis Distinguished Professor of Finance and Entrepreneurship the College of Business, Florida Atlantic University. His research interests include crowdfunding, venture capital, private equity, hedge funds, entrepreneurship, and law and finance. He is the Managing Editor-in-Chief of the Journal of Corporate Finance (2018-2020) and the incoming Co-Editor-in-Chief of the British Journal of Management (2020-2022). He been a guest editor for over a dozen special issues of top journals. He has published over 180 articles in leading refereed academic journals in finance, management, and law and economics, such as the Academy of Management Journal, Journal of Financial Economics, Review of Financial Studies, Journal of International Business Studies, and the Journal of Empirical Legal Studies. His work has been reviewed in numerous media outlets, including the Chicago Tribune, The Economist, Canadian Business, the National Post, the New York Times, and The New Yorker. Douglas is a regular speaker at academic and industry conferences around the world. He has given recent keynote speeches at the British Academy of Management Corporate Governance Conference, Entrepreneurial Finance Association, Financial Research Network Corporate Finance Conference, French Finance Association, Infiniti Conference on International Finance, Vietnam Symposium in Banking and Finance, the Budapest Liquidity and Financial Markets Conference, and the Humbolt University of Berlin Fintech Conference, among others. Much of Douglas Cumming’s work is online at SSRN: http://ssrn.com/author=75390

Affiliations and Expertise

DeSantis Distinguished Professor of Finance and Entrepreneurship, College of Business, Florida Atlantic University - Boca Raton, FL, USA

Sofia Johan

Sofia Johan
Sofia Johan, LL.B (Liverpool), LL.M. in International Economic Law (Warwick), Ph.D. in Law and Economics (Tilburg), is an Assistant Professor of Finance and Fellow, Phil Smith Center for Free Enterprise, at the College of Business, Florida Atlantic University. She is also the AFM Senior Research Fellow at the Tilburg Law and Economics Centre (TILEC) in The Netherlands. Her research is primarily focused on law and finance, market surveillance, hedge funds, venture capital, private equity and IPOs. Her recent publications have appeared in numerous journals including the Journal of Financial Economics, Journal of International Business Studies, American Law and Economics Review, International Review of Law and Economics, Journal of Banking and Finance, European Financial Management, European Economic Review, and Entrepreneurship Theory and Practice, among numerous other journals. Her work has been presented at the American Law and Economics Association, the American Economics Association, European Law and Economics Association, the European Financial Management Association, and other leading international conferences. Prior to winning her Ph.D., she was the head legal counsel at the largest government owned venture capital fund in Malaysia. She has also consulted for a variety of governmental and private organizations in Australasia and Europe. http://ssrn.com/author=370203

Affiliations and Expertise

Assistant Professor of Finance, College of Business, Florida Atlantic University - Boca Raton, FL, USA

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