Fast Growing Small Entrepreneurial Firms and their Venture Capital Backers: an Applied Principal-Agent Analysis
First the empirical background of the UK venture capital industry is developed using a panel of major UK venture capital funds over the period 1988-92. Then a framework for applied principal-agent analysis is developed, focusing on risk management and information. Under risk management it explores attitude to risk, risk sharing and bearing, and the effects of risk bearing on effort. Under information handling, it explores information systems, information asymmetries between investor (venture capitalist) and investee (entrepreneur), and ways of attenuating them, and information variance and costs. Finally, the contract between investor and investee is seen as a device for 'trading' risk and information. The implications of this 'trading' for risk bearing, effort and efficiency are explored. The whole analysis is supported by a detailed case study which reflects current practice in the UK venture capital industry.
|Date of creation:||Oct 1994|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 01334 462420
Fax: 01334 462438
Web page: http://crieff.wordpress.com/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chan, Yuk-Shee & Siegel, Daniel R & Thakor, Anjan V, 1990. "Learning, Corporate Control and Performance Requirements in Venture Capital Contracts," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 365-81, May.
- Siskos, Jean & Zopounidis, Constantin, 1987. "The evaluation criteria of the venture capital investment activity: An interactive assessment," Economics Papers from University Paris Dauphine 123456789/13190, Paris Dauphine University.
- Gregory D. Wozniak, 1987. "Human Capital, Information, and the Early Adoption of New Technology," Journal of Human Resources, University of Wisconsin Press, vol. 22(1), pages 101-112.
- Admati, Anat R & Pfleiderer, Paul, 1994. " Robust Financial Contracting and the Role of Venture Capitalists," Journal of Finance, American Finance Association, vol. 49(2), pages 371-402, June.
- Siskos, J. & Zopounidis, C., 1987. "The evaluation criteria of the venture capital investment activity: An interactive assessment," European Journal of Operational Research, Elsevier, vol. 31(3), pages 304-313, September.
- Chan, Yuk-Shee, 1983.
" On the Positive Role of Financial Intermediation in Allocation of Venture Capital in a Market with Imperfect Information,"
Journal of Finance,
American Finance Association, vol. 38(5), pages 1543-68, December.
- Yuk-Shee Chan., 1982. "On the Positive Role of Financial Intermediation in Allocation of Venture Capital in a Market with Imperfect Information," Research Program in Finance Working Papers 127, University of California at Berkeley.
- David E. M. Sappington, 1991. "Incentives in Principal-Agent Relationships," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 45-66, Spring.
- Falconer Mitchell & Gavin C Reid & Nicholas G Terry, 1994. "Post Investment Demand for Accounting Information by Venture Capitalists," CRIEFF Discussion Papers 9424, Centre for Research into Industry, Enterprise, Finance and the Firm.
- Sahlman, William A., 1990. "The structure and governance of venture-capital organizations," Journal of Financial Economics, Elsevier, vol. 27(2), pages 473-521, October.
- Lerner, Josh, 1995. " Venture Capitalists and the Oversight of Private Firms," Journal of Finance, American Finance Association, vol. 50(1), pages 301-18, March.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
When requesting a correction, please mention this item's handle: RePEc:san:crieff:9421. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bram Boskamp)
If references are entirely missing, you can add them using this form.