Books

Vladimir Atanasov, Vladimir Ivanov & Kate Litvak, The Impact of Litigation on Venture Capitalist Reputation (2007).

Abstract (from authors): Venture capital contracts give VCs enormous power over entrepreneurs and early equity investors of portfolio companies. A large literature examines how these contractual terms protect VCs against misbehavior by entrepreneurs. But what constrains misbehavior by VCs? We provide the first systematic analysis of legal and non-legal mechanisms that penalize VC misbehavior, even when such misbehavior is formally permitted by contract. We hand-collect a sample of over 177 lawsuits involving venture capitalists. The three most common types of VC-related litigation are: 1) lawsuits filed by entrepreneurs, which most often allege freezeout and transfer of control away from founders; 2) lawsuits filed by early equity investors in startup companies; and 3) lawsuits filed by VCs. Our empirical analysis of the lawsuit data proceeds in two steps. We first estimate an empirical model of the propensity of VCs to get involved in litigation as a function of VC characteristics. We match each venture firm that was involved in litigation to otherwise similar venture firm that was not involved in litigation and find that less reputable VCs are more likely to participate in litigation, as are VCs focusing on early-stage investments, and VCs with larger deal flow. Second, we analyze the relationship between different types of lawsuits and VC fundraising and deal flow. Although plaintiffs lose most VC-related lawsuits, litigation does not go unnoticed: in subsequent years, the involved VCs raise significantly less capital than their peers and invest in fewer deals. The biggest losers are VCs who were defendants in a lawsuit, and especially VCs who were alleged to have expropriated founders.

 

Paul Getty, Dinesh Gupta & Robert R. Kaplan, Regulation A+: How the JOBS Act Creates Opportunities for Entrepreneurs and Investors (2015).

 

Abstract (adapted from publisher): This book covers how to raise money under the SEC’s long-awaited

Regulation A+ implementing Title IV of the JOBS Act, and provides a guide to Regulation A+ for executives of

emerging growth companies, entrepreneurs, financial advisers, venture capitalists, investment bankers, securities

lawyers, and finance and MBA students. Regulation A+ lifts many of the constraints on soliciting funds, raising

growth capital through public offerings, and trading new stock issues that until now inhibited the growth of small

companies.

This book also explains how Title IV of the JOBS Act amends Regulation A+, making it easier to raise up to $50 million

in expansion capital while avoiding burdensome regulations; how raising funds through Regulation A+ might now be

a better and less costly choice for raising capital than current options (like loans or venture capital); how to use

Regulation A+ to gain liquidity for your business, your employees, and your investors -- while maintaining control;

how to abide by Regulation A rules before, during, and after an IPO; what kinds of businesses can take part in

Regulation A+ offerings; and how and where to trade shares after the IPO.

Paul A. Gompers & Josh Lerner, THE MONEY OF INNOVATION: HOW VENTURE CAPITAL CREATES WEALTH (2001).

Paul A. Gompers & Josh Lerner, THE VENTURE CAPITAL CYCLE (1999).

Jane Greyf et al, PRIVATE EQUITY AND VENTURE CAPITAL TRENDS IN A TURBULENT ECONOMY: LEADING LAWYERS ON DEVELOPING STRATEGIC ALLIANCES, EVALUATING NEW GROWTH OPPORTUNITIES, AND ANALYZING MARKET CHANGES (2009).

Abstract (from product description at Amazon.com): Provides a perspective on the impact of the financial crisis on market conditions and the key strategies to surviving the crisis. Featuring partners and chairs from law firms, these experts offer their insight into the current and potentially lasting economic trends that will impact private equity and venture capital deals today and tomorrow. Emphasizing the need for legal counsel to help clients spot the warning signs of an economic slowdown and think outside of the box in deal structuring, negotiations, and risk assessment, the authors offer new techniques that enable clients to remain successful despite the financial market s downward path and share predictions for potential market reforms that will further affect clients businesses. Additionally, these leaders discuss the increasing significance of global commerce on the U.S. private equity market and how to keep clients abreast of new opportunities abroad. The different niches represented and the breadth of perspectives presented enable readers to get inside some of the great legal minds of today, as these experienced lawyers offer up their thoughts around the keys to success within this constantly changing area of law.

 

Katherine Hague, Funded: The Entrepreneur’s Guide to Raising Your First Round (2016).

Abstract (from publisher): Entrepreneurs often struggle to raise their first round of financing, and even those who

do raise funds often make mistakes early on. This book uses real-life case studies to explain key startup financing

concepts that are generally misunderstood. The reader will learn how the process really works, and how these deals are

successfully completed.

Michael Klausner & Kate Litvak, What Economists Have Taught Us About Venture Capital Contracting, in Bridging the Entrepreneurial Financing Gap: Linking Governance with Regulatory Policy (Michael J. Whincop ed., 2001.)

Erick Walk, Startup 101 - How to Build a Successful Business with Crowdfunding: A Guide for Entrepreneurs (2016).

Abstract (adapted from Amazon): Imagine that small and medium businesses - a significant side of the economy – are not getting funding. Here is where crowdfunding comes into the scene as it allows small and medium scale enterprises to reach out for investors. This book will show you what crowdfunding is and how it will lead you to success. In this book you will learn: how crowdfunding fits your business model; how to take advantage of recent JOBS Act amendments; how to set a successful crowdfunding campaign; and how to find the proper platform to place your pitch. You will also learn from the most successful campaigns and understand how crowdfunding can help you in establishing your business.

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