2010
DOI: 10.1017/s0022109010000827
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Venture Capital Conflicts of Interest: Evidence from Acquisitions of Venture-Backed Firms

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Cited by 110 publications
(70 citation statements)
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“…Therefore, when a private equity fund is near the end of its contractual life, the GP faces pressure to realize investments. 8 Consistent with this observation, Masulis and Nahata (2009) found in the case of trade sales that the returns of the purchasing company are, on average, higher when the selling private equity fund is closer to maturity. Cumming and MacIntosh (2003a) conjecture that as the fund approaches its maturity, there may be portfolio companies that are not yet ready for a public offering or a strategic sale, which may make a secondary sale attractive, insofar as it can avoid having to request an extension on the life fund.…”
Section: Introductionmentioning
confidence: 72%
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“…Therefore, when a private equity fund is near the end of its contractual life, the GP faces pressure to realize investments. 8 Consistent with this observation, Masulis and Nahata (2009) found in the case of trade sales that the returns of the purchasing company are, on average, higher when the selling private equity fund is closer to maturity. Cumming and MacIntosh (2003a) conjecture that as the fund approaches its maturity, there may be portfolio companies that are not yet ready for a public offering or a strategic sale, which may make a secondary sale attractive, insofar as it can avoid having to request an extension on the life fund.…”
Section: Introductionmentioning
confidence: 72%
“…Table 5 summarizes how exit routes vary over the fund life. Masulis and Nahata (2009) conclude that private equity investors face a liquidity pressure as their funds approach maturity. In our sample 64% of IPO exits happen during the first six years of a fund, 26% during the seventh and eighth years, and only 10% happen after the eight year.…”
Section: Summary Statisticsmentioning
confidence: 98%
“…However, they do not find support for their fire-sale hypothesis. Furthermore, Masulis and Nahata (2011) report that when a VC backs a new venture in its seed or early life stages, acquisitions of these firms result in higher takeover premiums for targets. Although the assumption of exit being successful is not central in our work, we should note that we only focus on full acquisitions, which require both VCs and entrepreneurs to sell their equity in the venture.…”
Section: Ipos and Acquisitions As Exit Eventsmentioning
confidence: 99%
“…We test these competing propositions by examining a market with very sophisticated investors: the international leveraged buyout (''LBO'') market. The context herein is important, because if a private investor can arrange contracts and use other mechanisms to overcome costs associated with legal inefficiencies, then one would expect that such a sophisticated investor would be a private equity (''PE'') fund manager carrying out large international LBOs (Cao and Lerner, 2009;Nielsen, 2009;Officer et al, 2010;Renneboog 2008, 2009;Ivanov et al, 2011;Masulis and Nahata, 2011;Nahata, 2008). While early cross-country comparisons of earlier stage venture capital (''VC'') and expansion or mezzanine PE deals has considered security design (e.g., Lerner and Schoar, 2005), our analysis is unique in respect of our focus on large PE funds carrying out international LBOs.…”
Section: Introductionmentioning
confidence: 99%