Legality and venture governance around the world

Arbeitspapier

We analyze governance with a dataset on investments of venture capitalists in 3848 portfolio firms in 39 countries from North and South America, Europe and Asia spanning 1971-2003. We find that cross-country differences in Legality have a significant impact on the governance structure of investments in the VC industry: better laws facilitate faster deal screening and deal origination, a higher probability of syndication and a lower probability of potentially harmful co-investment, and facilitate board representation of the investor. We also show better laws reduce the probability that the investor requires periodic cash flows prior to exit, which is in conjunction with an increased probability of investment in high-tech companies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CFS Working Paper ; No. 2004/17

Classification and Topics

• Classification: Wirtschaft ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies ; Capital Budgeting; Fixed Investment and Inventory Studies; Capacity ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
• Subject: Venture Capital ; Corporate Governance ; Syndication ; Entrepreneurial Finance ; Risikokapital ; Aktienfonds ; Portfolio-Management ; Aktienrecht ; Corporate Governance ; Welt

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Cumming, Douglas ; Schmidt, Daniel ; Walz, Uwe
• Event: Veröffentlichung
• (who): Goethe University Frankfurt, Center for Financial Studies (CFS)
• (where): Frankfurt a. M.
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/25412
• URN: urn:nbn:de:hebis:30-10681
• Last update: 10.03.2025, 11:42 AM CET