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http://hdl.handle.net/10419/43232
  
Title:Venture capital exit rights PDF Logo
Authors:Bienz, Carsten
Walz, Uwe
Issue Date:2008
Series/Report no.:CFS Working Paper 2009/05
Abstract:Theorists argue that exit rights can mitigate hold-up problems in venture capital. Using a hand-collected data-set of venture capital contracts from Germany we show that exit rights are included more frequently in venture capital contracts when a hold-up problem associated with the venture capitalist's exit decision is likely. Examples include drag-along and tag-along rights. Additionally, we find that almost all exit rights are allocated to the venture capitalist rather than to the entrepreneur. In addition, we show that besides the basic hold-up mechanism there are other mechanisms such as ex-ante bargaining power and the degree of pledgeable income that drive the allocation of exit rights.
Subjects:Venture Capital
Corporate Governance
Empirical Contract Theory
Hold-up
Exit Rights
Trade-sale Rights
JEL:G24
G34
D80
Persistent Identifier of the first edition:urn:nbn:de:hebis:30-63764
Document Type:Working Paper
Appears in Collections:CFS Working Paper Series, Universität Frankfurt a. M.

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