The governance of entrepreneurship

Ofer Eldar

Chapter 6 in A Research Agenda for Corporate Law, 2023, pp 101-120 from Edward Elgar Publishing

Abstract: Entrepreneurial firms have assumed increasing prominence with the decline in the number of public firms and the increase of venture capital (VC) invested in startups. This chapter evaluates key policy issues in the governance of entrepreneurial firms, such as fiduciary duties, the role of independent directors, and contractual bargaining for control rights, and how different governance regimes may affect exit choices and innovative activity. Each of the issues is evaluated in light of developments that have changed the relationship between VC investors and startup founders, including ‘spray and pray’ investing, the increase in the supply of private capital, and the growing power of founders of successful startups. The main theme is that the changing dynamics between VC investors and founders calls for a reassessment of the laws and standards that govern entrepreneurial firms, and further research is needed to understand optimal governance for promoting startup growth and innovation

Keywords: Business and Management; Economics and Finance; Law - Academic; Politics and Public Policy (search for similar items in EconPapers)
Date: 2023
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