Agency costs, institutions, learning, and taxation in venture capital contracting

Journal of Business Venturing

Volumn 20, Issue 5, 2005, Pages 573-622

  Cumming, Douglas J ^a  

^a UNIVERSITY OF NEW SOUTH WALES   (Australia)

Author keywords

Capital structure; Financial contracts; Regulation; Venture capital

Indexed keywords

EID: 18144383547     PISSN: 08839026     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jbusvent.2003.07.001     Document Type: Article

References (79)

1. A.R. Admati P. Pfleiderer Robust financial contracting and the role for venture capitalists J. Finance 49 1994 371-402
2. P. Aghion P. Bolton An incomplete contracts approach to financial contracting Rev. Econ. Stud. 59 1992 473-494
3. R. Amit J. Brander C. Zott Why do venture capital firms exist? Theory and Canadian evidence J. Bus. Venturing 13 1998 441-466
4. A.L. Anand D. Johnston G. Peterson Canadian Securities Regulation - Cases, Notes and Materials 1999 Butterworths Canada Markham, Ontario
5. J.B. Barney L.W. Busenitz J.O. Fiet D.D. Moesel The relationship between venture capitalists and managers in new firms: Determinants of contractual covenants Manage. Finance 20 1994 19-30
6. A. Bascha U. Walz Convertible securities and optimal exit decisions in venture capital finance J. Corp. Finance 7 2001a 285-306
7. Bascha, A., Walz, U., 2001b. Financing practices in the German venture capital industry: An empirical assessment. Working Paper, University of Tünbingen.
8. E. Berglöf A control theory of venture capital finance J. Law Econ. Organ. 10 1994 247-267
9. D. Bergmann U. Hege Venture capital financing, moral hazard, and learning J. Bank. Financ. 22 1998 703-735
10. O.J. Blanchard F. Lopez de Silances A. Shleifer What do firms do with cash windfalls? J. Financ. Econ. 36 1994 337-360
11. J.A. Brander R. Amit W. Antweiler Venture capital syndication: Improved venture selection versus the value-added hypothesis J. Econ. Manage. Strategy 11 2002 423-452
12. M.J. Brennan A. Kraus Efficient financing under asymmetric information J. Finance 42 1987 1225-1243
13. C. Casamatta Financing and advertising: Optimal financial contracts with venture capitalists J. Finance 58 2003 2059-2086
14. F. Cornelli O. Yosha Stage financing and the role of convertible debt Rev. Econ. Stud. 70 2003 1-32
15. Cumming, D.J., 2001. Adverse selection and capital structure: Evidence from venture capital. Working paper, University of Alberta.
16. Cumming, D.J., 2002. Contracts and exits in venture capital finance. Working paper, University of Alberta.
17. D.J. Cumming Capital structure in venture finance J. Corp. Finance 2003 (in press)
18. D.J. Cumming J.G. MacIntosh A cross country comparison of full and partial venture capital exits J. Bank. Financ. 27 2003 511-548
19. Cumming, D.J., MacIntosh, J.G., 2004. Crowding out private equity: Canadian evidence. Working paper, University of Alberta and University of Toronto.
20. Cumming, D.J., Schmidt, D., Walz, U., 2004. Legality and venture governance around the world. Working paper, Center for Financial Studies, Frankfurt.
21. De Bettignies, J.-E., 2003. Financing the entrepreneurial venture. Working paper, University of British Columbia.
22. Garmaise, M., 2000. Informed investors and the financing of entrepreneurial projects. Working paper, University of Chicago Graduate School of Business.
23. R. Gilson D. Schizer Venture capital structure: A tax explanation for convertible preferred stock Harvard Law Rev. 116 2003 875-916
24. P.A. Gompers Optimal investment, monitoring, and the staging of venture capital J. Finance 50 1995 1461-1489
25. Gompers, P.A., 1997. Ownership and control in entrepreneurial firms: An examination of convertible securities in venture capital investments. Working paper, Harvard University.
26. P.A. Gompers J. Lerner The Venture Capital Cycle 1999 MIT Press Cambridge
27. P.A. Gompers J. Lerner The Money of Invention: How Venture Capital Creates New Wealth 2001 Harvard Business School Press Boston
28. R. Green Investment incentives, debt, and warrants J. Financ. Econ. 13 1984 115-136
29. P. Halpern Financing Growth in Canada (editor) 1997 University of Calgary Press
30. M. Harris A. Raviv The theory of capital structure J. Finance 46 1991 297-356
31. O. Hart J. Moore A theory of debt based on the alienability of human capital Q. J. Econ. 109 1994 841-879
32. Hege, U., Palomino, F., Schwienbacher, A., 2003. Determinants of venture capital performance: Europe and the United States. Working Paper, HEC School of Management. Tilburg University and the University of Amsterdam.
33. Hellmann, T., 2000. IPOs, acquisitions and the use of convertible securities in venture capital. Working paper, Stanford University.
34. M.C. Jensen Agency costs of free cash flow, corporate finance, and takeovers Am. Econ. Rev. 76 1986 323-329
35. M.C. Jensen W.H. Meckling Theory of the firm: Managerial behaviour, agency costs and ownership structure J. Financ. Econ. 3 1976 305-360
36. V. Kanniainen C. Keuschnigg The optimal portfolio of start-up firms in venture capital finance J. Corp. Finance 9 2003 521-534
37. V. Kanniainen C. Keuschnigg Start-up investment with scarce venture capital support J. Bank. Financ. 28 2004 1935-1959
38. S.N. Kaplan P. Strömberg Financial contracting theory meets the real world: An empirical analysis of VC contracts Rev. Econ. Stud. 70 2003 281-315
39. Kaplan, S.N., Martel, F., Strömberg, P., 2003. How does learning and institutions affect financial contracts? Working paper, University of Chicago.
40. C. Keuschnigg S.B. Nielsen Public policy for venture capital Int. Tax Public Financ. 8 2001 557-572
41. C. Keuschnigg S.B. Nielsen Tax policy, venture capital and entrepreneurship J. Public Econ. 87 2003 175-203
42. C. Keuschnigg S.B. Nielsen Taxes and venture capital support Rev. Finance 7 2003 515-539
43. C. Keuschnigg S.B. Nielsen Progressive taxation, moral hazard, and entrepreneurship J. Public Econ. Theory 6 2004 471-490
44. C. Keuschnigg S.B. Nielsen Start-ups, venture capitalists, and the capital gains tax J. Public Econ. 88 2004 1011-1042
45. H. Landström S. Manigart C. Mason H. Sapienza Contracts between entrepreneurs and investors: Terms and negotiation process In: P.D. Reynolds W.D. Bygrave N.M. Carter S. Manigart C.M. Mason G.D. Meyer K.G. Shaver (Eds.), Frontiers of Entrepreneurship Research 1998 1998 Babson College Welleslay, MA pp. 571-585
46. J. Lerner The syndication of venture capital investments Financ. Manage. 23 1994 16-27
47. J. Lerner The government as a venture capitalist: The long-run effects of the SBIR program J. Bus. 72 1999 285-318
48. J. Lerner Venture Capital and Private Equity: A Casebook 2000 Wiley New York
49. J. Lerner When bureaucrats meet entrepreneurs: The design of effective 'public venture capital' programmes Econ. J. 112 2002 F73-F84
50. J. Lerner A. Schoar Does legal enforcement affect financial transactions? The contractual channel in private equity Q. J. Econ. 2004 (forthcoming)
51. A. Lockett M. Wright The syndication of private equity: Evidence from the U.K Venture Cap.: Int. J. Entrepreneurial Finance 1 1999 303-324
52. A. Lockett M. Wright The syndication of venture capital investments Omega: Int. J. Manag. Sci. 29 2001 375-390
53. M. Macdonald VC in Canada: A Guide and Sources 1992 Canadian VC Association Toronto
54. MacIntosh, J.G., 1994. Legal and institutional barriers to financing innovative enterprise in Canada. Queen's University Discussion Paper, 94-10.
55. S. Manigart K. De Waele M. Wright K. Robbie P. Desbrières H. Sapienza A. Beekman Venture capital, investment appraisal, and accounting information: A comparative study of the US, UK, France, Belgium and Holland Eur. Financ. Manag. 6 2000 380-404
56. S. Manigart H. Sapienza W. Vermeir Venture capital governance and value-added in four countries J. Bus. Venturing 11 1996 439-469
57. Manigart, S., Korsgaard, M.A., Folger, R., Sapienza, H., Baeyens, K., 2002. The impact of trust on private equity contracts. Working Paper, Vlerick Leuven Gent Management School.
58. Manigart, S., Lockett, A., Meuleman, M., Wright, M., Landstrom, H., Bruining, H., Desbrieres, P., Hommel, U., 2002. Why do European venture capital companies syndicate? Working Paper, Vlerick Leuven Gent Management School.
59. S. Manigart K. DeWaele M. Wright K. Robbie P. Desbrieres H.J. Sapienza A. Beekman The determinants of the required returns in venture capital investments: A five-country study J. Bus. Venturing 17 2002 291-312
60. L. Marx Efficient venture capital financing combining debt and equity Rev. Econ. Des. 4 1998 371-387
61. A. Mas-Colell M.D. Whinston J.R. Green Microeconomic Theory 1995 Oxford University Press New York
62. C. Mayer K. Schoors Y. Yafeh Sources of funds and investment strategies of venture capital funds: Evidence from Germany, Israel, Japan and the UK J. Corp. Finance 2004 (forthcoming)
63. D. Mayers Why firms issue convertible bonds: The matching of financial and real investment options J. Financ. Econ. 47 1998 83-102
64. J. Mintz Report of the Technical Committee on Business Taxation 1997 Department of Finance Ottawa
65. S.C. Myers N. Majluf Corporate financing and investment decisions when firms have information that investors do not have J. Financ. Econ. 13 1984 187-222
66. T.H. Noe M.J. Rebello Asymmetric information, managerial opportunism, financing and payout policies J. Finance 51 1996 637-660
67. R.G. Rajan Insiders and outsiders: The choice between informed and arm's length debt J. Finance 47 1992 1367-1400
68. W.A. Sahlman The structure and governance of venture capital organizations J. Financ. Econ. 27 1990 473-521
69. D. Sandler The tax treatment of employee stock options: Generous to a fault Can. Tax J. 49 2001 259-302
70. H. Sapienza When do venture capitalists add value? J. Bus. Venturing 7 1992 9-27
71. K.M. Schmidt Convertible securities and venture capital finance J. Finance 58 2003 1139-1166
72. Schwienbacher, A., 2002. Venture capital exits in Europe and the United States. Working paper, University of Amsterdam.
73. L. Songtao Venture capital development in Taiwan Asia Pac. Econ. 2001 3
74. J. Tirole The Theory of Industrial Organization 1998 MIT Press Cambridge
75. H. Theil A multinomial logit extension of the linear logit model Int. Econ. Rev. 10 1969 251-259
76. J.J. Trester Venture capital contracting under asymmetric information J. Bank. Financ. 22 1998 675-699
77. M. Wright A. Lockett The structure and management of alliances: syndication in the venture capital industry J. Manag. Stud. 40 2003 2073-2104
78. M. Wright R.E. Hoskisson L.W. Busenitz J. Dial Finance and management buyouts: Agency versus entrepreneurship perspectives Venture Cap.: Int. J. Entrepreneurial Finance 3 2001 239-262
79. Yung, C., 2002. Security design in private markets. Working Paper, University of Colorado.