The allocation of control rights in venture capital contracts
Article Abstract:
A model showing the relationship between venture capitalist and entrepreneurs gives new insights into the observe relinquishing of control rights of the entrepreneur to the venture capitalist. The behavior is rooted in the perception of benefits to the enterprise, with the entrepreneur surrendering both control and monetary benefits on the belief that the action would increase profits for the company. The model also show that the investor control over the enterprise is a function of the entrepreneurs equity stake and resource requirement.
Publication Name: RAND Journal of Economics
Subject: Economics
ISSN: 0741-6261
Year: 1998
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A dynamic model of endogenous horizontal mergers
Article Abstract:
A study was conducted to analyze a dynamic framework wherein investments, mergers, entry and exit are endogenous factors that are rationally selected by companies to optimize anticipated future profits. The model integrates dynamics and endogenizes the merger process and supports predictions that are feasible. Results indicated that the framework can be utilized as a tool in examining antitrust policies.
Publication Name: RAND Journal of Economics
Subject: Economics
ISSN: 0741-6261
Year: 1999
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