Abstract

http://ssrn.com/abstract=1733743
 
 

References (52)



 
 

Citations (6)



 


 



Venture Capital Exit Rights


Carsten Bienz


Norwegian School of Economics (NHH); London School of Economics - Financial Markets Group (FMG); Center for Financial Studies (CFS)

Uwe Walz


Goethe University Frankfurt - Institute of Economics; Center For Financial Studies (CFS); Goethe University Frankfurt - Research Center SAFE

November 22, 2010

Journal of Economics & Management Strategy, Vol. 19, Issue 4, pp. 1071-1116, 2010

Abstract:     
We investigate when and how venture capital contracts use exit rights such as drag-along and tag-along rights. Utilizing a data set of venture capital contracts from Germany, we find that almost all contracts allocate exit rights to the venture capitalist (VC) rather than to the entrepreneur. In our data set, the vast majority of exit rights deal with the sale of the entire company to a strategic investors rather than with initial public offerings (IPOs). We show that venture capital contracts include exit rights to mitigate potential hold?up problems of the VC in the case of exit.

Number of Pages in PDF File: 46

Accepted Paper Series





Date posted: January 10, 2011  

Suggested Citation

Bienz, Carsten and Walz, Uwe, Venture Capital Exit Rights (November 22, 2010). Journal of Economics & Management Strategy, Vol. 19, Issue 4, pp. 1071-1116, 2010. Available at SSRN: http://ssrn.com/abstract=1733743 or http://dx.doi.org/10.1111/j.1530-9134.2010.00278.x

Contact Information

Carsten Bienz (Contact Author)
Norwegian School of Economics (NHH) ( email )
Helleveien 30
Bergen
Norway
London School of Economics - Financial Markets Group (FMG) ( email )
FMG R409
Houghton Street
London, N7 6BS
United Kingdom
+47 55 959 374 (Phone)
Center for Financial Studies (CFS) ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
Uwe Walz
Goethe University Frankfurt - Institute of Economics ( email )
Postfach 81
D-60054 Frankfurt
Germany
Center For Financial Studies (CFS) ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
Goethe University Frankfurt - Research Center SAFE ( email )
(http://www.safe-frankfurt.de)
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
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