The Allocation of Control Rights in Financing Private Companies
Views of Estonian Private Equity and Venture Capitalists
Bibliographic Data
| ID | 20205977 |
|---|---|
| Authors | Priit Sander (University of Tartu), Margus Kõomägi (University of Tartu) |
| Year | 2007 |
| Volume | 11 |
| Issue | 2 |
| Pages | 189-205 |
| Publication date | 2007-10-05 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Trames Journal of the Humanities and Social Sciences (JOURNAL) |
| Journal identifiers | ISSN: 1406-0922 • E-ISSN: 1736-7514 |
| Publisher | Estonian Academy Publishers (PUBLISHER • EE) |
| DOI | 10.3176/tr.2007.2.07 |
| OpenAlex | W276644360 |
| Language | EN |
| References cited | 6 |
This paper analyzes the allocation of control rights in financing private companies by private equity and venture capitalists in Estonia. Structured interviews with main providers of venture capital and private equity were conducted to collect the information about the current practice in Estonia and to highlight topical problems in this field. Due to the legal restrictions imposed on the preferred shares and convertible debt, most Estonian venture capitalists use common shares in financing high-growth firms and take similar risk position as entrepreneurs. Although, by using common shares, venture capitalists obtain voting rights, the minority ownership by itself does not provide sufficient protection of their interests. Venture capitalists increase their influence over the company through the active involvement in supervisory and management boards and detailed termsheets which include different vetoes and additional clauses
Business · Economics · Estonian · Management · Political science · Private enterprise · Private equity · Private equity firm · Private equity fund · Private equity secondary market · Social venture capital · Venture capital · Corporate Finance and Governance · Firm Innovation and Growth · Private Equity and Venture Capital · Finance
| Highly cited | No |
|---|