Exit Control, Capital Structure and Financial Contracts in Venture Capital - a Comment on BerglöF 1994

2006 ◽  
Author(s):  
Maik Piehler ◽  
Bernhard Schwetzler
Keyword(s):  
Venture Capital ◽  
Capital Structure ◽  
Financial Contracts

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.

Location Specific Styles and US Venture Capital Contracting

2015 ◽  
Vol 05 (03) ◽  
pp. 1550012 ◽  
Author(s):  
Ola Bengtsson ◽  
S. Abraham Ravid
Keyword(s):  
Venture Capital ◽  
Cash Flow ◽  
Ceo Compensation ◽  
Contract Design ◽  
Control Rights ◽  
Financial Contracts ◽  
Compensation Contracts ◽  
The Us

This paper shows that several contractual equilibria coexist in the US venture capital (VC) contracts. Our database is larger than that of previous studies and includes 1,804 contracts. Our main finding is that California-based entrepreneurs receive less harsh contract terms. In particular, investors subject to California-based or California style contracts have less downside protection. This “California effect” remains large and significant even after we include all the previously discovered controls which determine contract design. We find a similar effect if the VC is located in California, or if a non-California VC had a large exposure to the California market. We do not find evidence that VCs are substituting cash flow contingencies for control rights or for performance-based CEO compensation contracts. We also document several other new contractual features of VC contracts. In particular, we find that better companies and more experienced VCs receive better contract terms, whereas older companies receive harsher contracts. We also confirm the role of concentration and proximity in financial contracts.

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

scholarly journals Venture capital and microfinance: an instrumental approach

2018 ◽  
Vol 3 (2) ◽  
pp. 107
Author(s):  
Romar Correa ◽  
Amelia Correa
Keyword(s):  
Venture Capital ◽  
Consumer Goods ◽  
Full Employment ◽  
Venture Capitalists ◽  
Financial Contracts ◽  
Stationary Equilibrium ◽  
Employment Level ◽  
Instrumental Approach ◽  
Full Utilization ◽  
Two Sectors

<p>Following Adolph Lowe, we divide the economy into two sectors, equipment-goods industries and consumer-goods industries, operating over two periods. A structural relationship between the outputs in the two periods is given by a set of inequalities. One possible outcome is a state of less-than-full utilization of available resources. The economy consists of firms and households. Firms are technology entrepreneurs possessing blueprints for the transformation of the existing inefficient level of output to a full employment level, but no wealth. A subset of households, venture capitalists, is available in each of the three sectors. They finance the technologies in exchange for a share of the profits. We show that a stationary equilibrium exists only in the case when financial contracts are written in the second sector.</p>

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