Bargaining Power – Effective Venture Capital Contracts Come in Many Forms

PLEASE NOTE
Capital Ideas is now Chicago Booth Review but unfortunately original articles are no longer available. If you click through you will be taken to the Internet Archive site to find an archived copy.

How much can venture capitalists protect themselves against losses if an investment goes bad? How much control should entrepreneurs be prepared to give up? What happens to both parties when a new venture succeeds? To successfully tackle the good, bad, and in-between stages of new ventures, writing the appropriate financial contract is key.

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