scholarly journals Understanding Venture Capital Structure: A Tax Explanation for Convertible Preferred Stock

2002 ◽  
Author(s):  
Ronald J. Gilson ◽  
David M. Schizer
Keyword(s):  
Venture Capital ◽  
Capital Structure ◽  
Preferred Stock

scholarly journals Preferred stock: Some insights into capital structure

2013 ◽  
Vol 21 ◽  
pp. 77-86 ◽  
Author(s):  
Jarl Kallberg ◽  
Crocker H. Liu ◽  
Sriram Villupuram
Keyword(s):  
Capital Structure ◽  
Preferred Stock

Public Utility Old Money Preferred Stocks

2002 ◽  
Vol 24 (1) ◽  
pp. 1-16 ◽  
Author(s):  
T. J. Atwood
Keyword(s):  
Capital Structure ◽  
Public Utility ◽  
Public Utilities ◽  
Tax Rates ◽  
Preferred Stock ◽  
Marginal Tax Rates ◽  
Flow Through ◽  
Corporate Investors ◽  
Tax Savings ◽  
Utility Managers

Public utilities can claim a partial dividends-paid deduction on “old money” preferred stock (OMPS) but the 42 percent dividends-received deduction (DRD) allowed to corporate investors is lower than the 70 percent DRD allowed on other types of preferred stock. This study provides evidence that the implicit tax borne by OMPS is lower than that of other preferred stock and that the estimated implicit tax associated with the 70 percent DRD is much higher than prior research suggests. Evidence is also presented indicating that marginal investors in OMPS are corporations with marginal tax rates between 26.3 percent and 27.2 percent. Finally, this study provides evidence that public utilities use OMPS financing in addition to, rather than as a substitute for, other types of preferred stock. This result suggests that tax considerations influence public utility managers' capital structure decisions even though tax savings flow through to ratepayers in the rate-making process.

Graceful Exits and Missed Opportunities: Xerox's Management of its Technology Spin-off Organizations

2002 ◽  
Vol 76 (4) ◽  
pp. 803-837 ◽  
Author(s):  
Henry Chesbrough
Keyword(s):  
Venture Capital ◽  
Capital Structure ◽  
Ad Hoc ◽  
Corporate Strategy ◽  
Research Centers ◽  
Missed Opportunities ◽  
The Future ◽  
Capital Financing ◽  
The Common ◽  
Common Perception

The Xerox Corporation has devised several strategies for managing the numerous spin-off firms that independently commercialized many of its technologies. From 1979 to 1998, thirty-five technology-based organizations emerged from Xerox's research centers. Contradicting the common perception that Xerox “fumbled the future” by letting its technology walk out the door, in fact the company set in motion a series of deliberate initiatives to manage its spin-off organizations. After initially adopting a laissez-faire approach, the company soon turned to ad hoc methods, which evolved into a formal internal venture capital structure and culminated in a triage process, with the result that only companies perceived by Xerox as fitting into its overall corporate strategy were retained. By using spin-offs to withdraw gracefully from areas it considered to be marginal, Xerox for feited the potential to realize value from their research. Some, but not all, of the spin-offs obtained venture capital financing from outside sources and thus prospered independently. Their success demonstrated the opportunity that Xerox missed in managing its spin-offs.

Securenet, Inc.: Series A Round

2017 ◽  
pp. 1-21
Author(s):  
Susan Chaplinsky ◽  
April Triantis
Keyword(s):  
Venture Capital ◽  
School Setting ◽  
Law School ◽  
Venture Capitalists ◽  
Mba Programs ◽  
Preferred Stock ◽  
Security Software ◽  
In Series ◽  
Financial Issues ◽  
Angel Investors

This case is designed for use in JD/MBA programs or in contexts where mutual understanding of legal and financial issues is required. The case focuses on an entrepreneur in the security-software industry who is attempting to raise a first round of financing in October 2000. The firm was unsuccessful in attracting funding from venture capitalists and has relied on a small seed round and bridge loan from angel investors. The angels have now proposed investing $1.4 million in Series A convertible preferred stock. The entrepreneur must decide whether to accept the angel investors' proposal or revisit the issue of seeking venture capital. The case incorporates the Stockholder Agreement for the proposed Series A round, the capitalization of the company after the seed round, and five years of cash-flow projections for the firm. The case can be used in a law-school setting as a contract-drafting exercise and as an introduction to valuation. In a business-school setting, the case can help students understand the complex contract terms associated with a “plain-vanilla” form of venture capital. Valuation can be taught at an introductory level, or it can be made more complex if students are asked to incorporate “what-if” contract conditions into their analysis.

scholarly journals THE CAPITAL STRUCTURE OF VENTURE CAPITAL FIRMS IN INDONESIA

2016 ◽  
Vol 20 (3) ◽  
Author(s):  
Andi Buchari ◽  
Noer Azam Achsani ◽  
Mangara Tambunan ◽  
Tubagus Nur Ahmad Maulana
Keyword(s):  
Venture Capital ◽  
Capital Structure ◽  
Venture Capital Firms ◽  
The Capital Structure
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