Venture capital contracts

• 成果类型: Article
• 署名作者: Ewens, Michael; Gorbenko, Alexander; Korteweg, Arthur
• 署名单位: California Institute of Technology; University of London; University College London; University of Southern California
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2021.06.042
• 发表日期: 2022
• 页码: 131-158
• 关键词: venture capital; CONTRACTS; entrepreneurship; matching; Structural

摘要

We estimate the impact of venture capital (VC) contract terms on startup outcomes and the split of value between the entrepreneur and investor, accounting for endogenous selection via a novel dynamic search-and-matching model. The estimation uses a new, large data set of first financing rounds of startup companies. Consistent with efficient contracting theories, there is an optimal equity split between agents, which maximizes the probability of success. However, venture capitalists (VCs) use their bargaining power to receive more investor-friendly terms compared to the contract that maximizes startup values. Better VCs still benefit the startup and the entrepreneur due to their positive value creation. Counterfactuals show that reducing search frictions shifts the bargaining power to VCs and benefits them at the expense of entrepreneurs. The results show that the selection of agents into deals is a first-order factor to take into account in studies of contracting. (c) 2021 Elsevier B.V. All rights reserved.