Book 19

Venture Capital Investment

by Gavin C. Reid

Published 10 January 1998
Venture capital is a relatively new investment form in the 1990s, especially in the UK and Europe. However, there exixts no systematic analysis of what drives investor-investee relations in venture capital markets using a unified and coherent framework. This text employs a principal agent framework to provide a contemporary, global analysis of contracting relations practice. By developing this state-of-the-art framework, Gavin Reid is able to develop a powerful organizing principle for viewing the bewildering complexity of real-world venture capital activity. The principal-agent framework is simply and non-technically expounded and background information on the UK capital industry provided before the reader is presented with the main body of the work. This consists of a series of in-depth case studies of investor-investee relations, based on extensive empirical research and organized around the principal-agent method, which provides valuable insights into contemporary UK venture capital practice.
The book also considers risk management from the perspective of both contracting parties, information system development post-contract, and the "trading" of risk and information in pursuit of superior contracting between investors and investees. The author concludes by employing the principal-agent method both to predict trends in UK venture capital activity and prescribe better business practice.