search query: @journal_id 1275 / total: 203
reference: 142 / 203
| Author: | Hellmann, T. |
| Title: | The allocation of control rights in venture capital contracts |
| Journal: | RAND Journal of Economics
1998 : SPRING, VOL. 29:1, p. 57-76 |
| Index terms: | ALLOCATION CONTROL VENTURE CAPITAL |
| Language: | eng |
| Abstract: | Venture capitalists often hold extensive control rights over entrepreneurial companies, including the right to fire entrepreneurs. This article examines why, and under what circumstances, entrepreneurs would voluntarily relinquish control. Control rights protect the venture capitalists from hold-up by the entrepreneurs. This provides the correct incentives for the venture capitalists to search for a superior management team. Wealth-constrained entrepreneurs may give up control even if the change in management imposes a greater loss of private benefit to them than a monetary gain to the company. |
SCIMA