Record Details

Venture Capital and the Use of Convertible Securities and Control Rights Covenants: A Fuzzy Set Approach

European Journal of Business Science and Technology

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Field Value
 
Title Venture Capital and the Use of Convertible Securities and Control Rights Covenants: A Fuzzy Set Approach
 
Creator Correia, Maria do Rosario
Meneses, Raquel F. Ch.
 
Description Although venture capital is considered crucial for promoting economic development and innovation, not much has been done regarding the use of complex financing contracts in venture capital backed investments. In this study we investigate the use of convertible securities and control rights covenants for a sample of 15 Portuguese venture capital firms. We use an innovative methodology - a fuzzy set Qualitative Comparative Analysis - that considers both quantitative and qualitative factors for obtaining a solution that best fits the empirical data. Our results show that the use of convertible securities is affected by the anticipated severity of double-sided moral hazard problems. On the other hand, only a weak support is provided to the agency predictions regarding the use of control right covenants. Interestingly, the results reveal that convertible securities, unlike control rights covenants, are the most apt instruments to reduce costly double-sided incentive problems of a venture capital relationship
 
Publisher Mendel University in Brno
 
Date 2019-08-31
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://journal.ejobsat.cz/index.php/ejobsat/article/view/152
10.11118/ejobsat.v5i1.152
 
Source European Journal of Business Science and Technology; Vol 5 No 1 (2019); pp. 5–20
2694-7161
2336-6494
 
Language eng
 
Relation https://journal.ejobsat.cz/index.php/ejobsat/article/view/152/166
 
Rights Copyright (c) 2019 Maria do Rosario Correia, Raquel F. Ch. Meneses
http://creativecommons.org/licenses/by-sa/4.0