Venture Capitalists as Principals: Contracting, Screening, and Monitoring

By Steven N. Kaplan, Per Strömberg. 2001

679 citations recorded by the source corpus.

Subfields: Accounting, Management Science and Operations Research

View Paper: https://www.semanticscholar.org/paper/e324f88672207e60738c98ae405c81cbdc37c88b

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

1. Douglas J. Cumming
2. David H. Hsu
3. Luca Grilli
4. Massimo G. Colombo
5. A. Yasuda
6. Andrew Metrick
7. C. Keuschnigg
8. Steven N. Kaplan

In Management Science and Operations Research

1. David H. Hsu
2. Deborah Strumsky
3. Junfu Zhang
4. Holger M. Müller
5. Roman Inderst
6. Thomas F. Hellmann
7. Matt Marx
8. C. Keuschnigg

Citations in the corpus

• The impact of venture capital on innovation behaviour and firm growth (2010, neutral): “Generally, venture capitalists specialize in the skills of screening, contracting and advising (Kaplan and Stromberg 2001 ).”
• Start-Up Investment with Scarce Venture Capital Support (2004, background): “When the rate of business formation accelerates, the incumbent venture capitalists tend to include more firms in their portfolio which dilutes the quality of advice, making project risks excessively high in the short-run.”
• The advantage of experienced start-up founders in venture capital acquisition: evidence from serial entrepreneurs (2007, positive): “The economics/finance literature emphasizes the staging of capital and the risk-sharing feature of the design of VC investment contracts as a solution (Gompers, 1999; Gompers and Lerner, 2000; Kaplan and Strömberg, 2001, 2003, and 2004).”
• How do venture capitalists make decisions? (2020, background): “Kaplan and Strömberg (2004) examine venture capitalist investment memoranda that describe the investment theses and risks of their investments.”
• Trademarks and Venture Capital Valuation (2014, positive): “Prior research shows that VCs actively support the professionalization of start-ups (Kaplan and Strömberg, 2001).”
• Why do public firms go private in the UK? The impact of private equity investors, incentive realignment and undervaluation (2007, background): “3 Performance contingent contract operating as an incentive device enabling management to increase its equity holdings in a post-buyout firm upon meeting ex ante specified performance targets (Kaplan and Stromberg, 2001).”
• The Firm Strikes Back (2011, background): “Kaplan and Stromberg (2001) note that venturecapital contracts routinely stipulate that their portfolio companies must have non-compete contracts with employees, which may indicate that small companies typically do not use them.”
• Venture Capital and Other Private Equity: A Survey (2011, positive): “…to those in BO-company contracts stems from the fact that the relationships between VCs and entrepreneurs resemble the theoretically pristine (but hard to find in practice) setup of principal-agent models that are used in much of the contract-theory literature [(Kaplan and Stromberg 2001)].”