Venture Capital and Private Equity Contracting, 2nd Edition

  • Published By:
  • ISBN-10: 0124095968
  • ISBN-13: 9780124095960
  • DDC: 658.15224
  • Grade Level Range: College Freshman - College Senior
  • 780 Pages | eBook
  • Original Copyright 2013 | Published/Released May 2014
  • This publication's content originally published in print form: 2013

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Other books present corporate finance approaches to the venture capital and private equity industry, but many key decisions require an understanding of how law and economics work together. This revised 2e offers broad perspectives and principles not found in other texts, enabling readers to deduce the economic implications of specific contract terms. This approach avoids the common pitfall 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.

Table of Contents

Front Cover.
Half Title Page.
Title Page.
Copyright Page.
Dedication Page.
1: Introduction.
2: Introduction and Overview.
3: Overview of Agency Theory, Empirical Methods, and Institutional Contexts.
4: Overview of Institutional Contexts and Empirical Methods.
5: Fund Structure and Governance.
6: Fundraising and Regulation.
7: Limited Partnership Agreements.
8: Compensation Contracts.
9: Style Drift.
10: Institutional Investment in Listed Private Equity.
11: The Role of Government and Alternative Policy Options.
12: Financial Contracting Between Funds and Entrepreneurs.
13: The Investment Process.
14: Security Design.
15: Preplanned Exits and Contract Design.
16: Legal Conditions and Venture Capital Governance.
17: Investor Effort.
18: Investor Value Added.
19: Contracts and Effort.
20: Local Bias.
21: Portfolio Size.
22: Fund Size.
23: Divestment.
24: The Divestment Process.
25: Investment Duration.
26: Contracts and Exits.
27: Returns, Valuation, and Disclosure.
28: Conclusion and Appendices.
29: Summary and Concluding Remarks.