Advice and monitoring in venture finance

被引：46

作者：

Cumming D. ^{[1
]}

Johan S.A.B. ^{[2
,3
]}

机构：

[1] Department of Finance and Accounting, Lally School of Management and Technology, Rensselaer Polytechnic Institute (RPI), Troy

[2] Center for Business Law, Universiteit Van Tilburg, 5000 LE Tilburg

[3] TILEC

来源：

Financial Markets and Portfolio Management | 2007年 / 21卷 / 1期

关键词：

Advice; Monitoring; Venture capital;

D O I：

10.1007/s11408-006-0041-3

中图分类号：

学科分类号：

摘要：

This paper provides empirical insight into the role of contracts and legal systems for managing investor-investee relationships along two dimensions: providing advice and addressing conflict. We examine a new detailed dataset from European venture capital (VC) funds. We match very specific contractual terms in VC contracts with the effort (total time spent) and advice that VCs provide to their entrepreneurial investee firms. We also analyze VC-entrepreneur conflicts. We compare the importance of contractual versus non-contractual governance mechanisms, as well as the role of legal systems in different countries for facilitating VC-entrepreneur relationships. The data indicate VC cash-flow and control rights significantly facilitating effort and advice that VCs provide to entrepreneurs. VC-entrepreneur conflicts are closely tied to the quality of laws in which the entrepreneur resides: higher quality legal systems mitigate VC-entrepreneur conflicts. The data further indicate that non-contractual governance mechanisms significantly facilitate VC advice and mitigate VC-entrepreneur conflicts. The results provide a unique unifying look into the role of actual VC contracts and legal settings versus non-contractual governance mechanisms, risk, and success potential on VC-entrepreneur relationships in an international context. © Swiss Society for Financial Market Research 2007.

引用

页码：3 / 43

页数：40

共 77 条

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