TY  - JOUR
AU  - Kaplan,Steven N.
AU  - Stromberg,Per
TI  - Characteristics, Contracts, and Actions: Evidence from Venture Capitalist Analyses
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8764
PY  - 2002
Y2  - February 2002
UR  - http://www.nber.org/papers/w8764
L1  - http://www.nber.org/papers/w8764.pdf
N1  - Author contact info:
Steven N. Kaplan
Booth School of Business
The University of Chicago
5807 South Woodlawn Avenue
Chicago, IL 60637
Tel: 773/702-4513
Fax: 773/702-0458
E-Mail: steven.kaplan@chicagobooth.edu

Per Stromberg
Institute for Financial Research (SIFR)
Drottninggatan 89
SE-113 60 Stockholm
Sweden
Tel: +46 8 728-5128
Fax: +46 8 728 5130
E-Mail: per.stromberg@sifr.org
AB  - We study the investment analyses of 67 portfolio investments by 11 venture capital (VC) firms. VCs consider the attractiveness and risks of the business, management, and deal terms as well as expected post-investment monitoring. We then consider the relation of the analyses to the contractual terms. Greater internal and external risks are associated with more VC cash flow rights, VC control rights; greater internal risk, also with more contingencies for the entrepreneur; and greater complexity, with less contingent compensation. Finally, expected VC monitoring and support are related to the contracts. We interpret these results in relation to financial contracting theories.
ER  -