The dynamics of venture capital contracts
- We analyze the degree of contract completeness with respect to staging of venture capital investments using a hand-collected German data set of contract data from 464 rounds into 290 entrepreneurial firms. We distinguish three forms of staging (pure milestone financing, pure round financing and mixes). Thereby, contract completeness reduces when going from pure milestone financing via mixes to pure round financing. We show that the decision for a specific form of staging is determined by the expected distribution of bargaining power between the contracting parties when new funding becomes necessary and the predictability of the development process. To be more precise, parties choose the more complete contracts the lower the entrepreneur's expected bargaining power - the maximum level depending on the predictability of the development process. JEL Classification: G24, G32, D86, D80, G34
| Verfasserangaben: | Carsten Bienz, Julia Hirsch |
|---|---|
| URN: | urn:nbn:de:hebis:30-26076 |
| Titel des übergeordneten Werkes (Deutsch): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2006,11 |
| Schriftenreihe (Bandnummer): | CFS working paper series (2006, 11) |
| Dokumentart: | Arbeitspapier |
| Sprache: | Englisch |
| Jahr der Fertigstellung: | 2006 |
| Jahr der Erstveröffentlichung: | 2006 |
| Veröffentlichende Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Datum der Freischaltung: | 08.05.2006 |
| Freies Schlagwort / Tag: | contract econometrics; contract theory; corporate governance; empirical contract theory; moral hazard; renegotiation; venture capital |
| GND-Schlagwort: | Risikokapital; Corporate Governance; Vertrag |
| HeBIS-PPN: | 195434366 |
| Institute: | Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) |
| DDC-Klassifikation: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Lizenz (Deutsch): |  Deutsches Urheberrecht |
