Skip to main content
Venture Capital Contracting in the Information Age
Journal of Small & Emerging Business Law
  • D. Gordon Smith
Publication Date
Document Type

Most venture capitalists provide services to their portfolio companies beyond capital investment. Although these services form an important part of the bargain between the venture capitalists and the entrepreneur, they are rarely specified or even capable of specification in venture capital contracts. This article examines the moral hazard and adverse selection problems facing entrepreneurs who hire venture capitalists to provide value-added services and describes the role of the market for venture capitalist reputation in addressing those problems. Further, the Article speculates about whether advances in information technology - specifically, the World Wide Web - are likely to improve the efficiency of the market for venture capitalist reputation.

General Notes
For "Financing Innovation" sponsored by Lewis & Clark School, Portland, Oregon on September 26, 1997.
Citation Information
D. Gordon Smith, ๐˜๐˜ฆ๐˜ฏ๐˜ต๐˜ถ๐˜ณ๐˜ฆ ๐˜Š๐˜ข๐˜ฑ๐˜ช๐˜ต๐˜ข๐˜ญ ๐˜Š๐˜ฐ๐˜ฏ๐˜ต๐˜ณ๐˜ข๐˜ค๐˜ต๐˜ช๐˜ฏ๐˜จ ๐˜ช๐˜ฏ ๐˜ต๐˜ฉ๐˜ฆ ๐˜๐˜ฏ๐˜ง๐˜ฐ๐˜ณ๐˜ฎ๐˜ข๐˜ต๐˜ช๐˜ฐ๐˜ฏ ๐˜ˆ๐˜จ๐˜ฆ, 2 J. SMALL & EMERGING BUS. L., 133 (1998).