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Most entrepreneurs seek VC funding after the reward-based crowdfunding campaign succeeds, and venture capitalists (VCs) can contribute to the project in two aspects: investment and operational expertise. With a game-theoretical model, we find that entrepreneurs face twelve possible scenarios contingent on the mass market revenue and revenue share, including the six scenarios wherein neither side exerts effort to complete the project. To attract VC funding and ensure the project completion after a campaign success, entrepreneurs should set the funding goal above a certain threshold. Specifically, we identify three ranges of the revenue share and derive the lower bound for the funding goal in each range. However, we notice that entrepreneurs prefer a low funding goal to promise the campaign success and the optimal goal will be the lower bound in each range. Moreover, we show that the revenue share is decisive to the role of VCs in the project. If the entrepreneur's share exceeds a high threshold, the venture capitalist becomes a pure investor with no incentive to exert effort, similar to the role of banks; if the share is less than a low threshold, the entrepreneur won't follow up but transfers the project, and the VC investor will be a project owner; if the share stays medium, the VC investor acts as a partner and there may exist "free-riding". In the extension, we consider the revenue share an endogenous and analyse the role of VCs further. Interestingly, the VC investor prefers to own the project and occupy all revenue in mass market, while the entrepreneur treats the inefficient venture capitalist as a pure investor and the efficient one as a partner. In addition, when cooperating with efficient VCs, the entrepreneur is more likely to enlarge her share as the mass market revenue increases. [ABSTRACT FROM AUTHOR]

This paper investigates the implications of the fair value protections contemplated by the standard corporate contract (i.e., the standard contract form for which corporate law provides) for the entrepreneur–venture capitalist relationship, focusing, in particular, on unavoidable value-destroying trade sales. First, it demonstrates that the typical entrepreneur–venture capitalist contract does institutionalize the venture capitalist's liquidity needs, allowing, under some circumstances, for counterintuitive instances of contractually-compliant value destruction. Unavoidable value-destroying trade sales are the most tangible example. Next, it argues that fair value protections can prevent the entrepreneur and venture capitalist from allocating the value that these transactions generate as they would want. Then, it shows that the reality of venture capital-backed firms calls for a process of adaptation of the standard corporate contract that has one major step in the deactivation or re-shaping of fair value protections. Finally, it argues that a standard corporate contract aiming to promote social welfare through venture capital should feature flexible fair value protections. [ABSTRACT FROM AUTHOR]

This paper is designed to analyse the effectiveness of tag-along and drag-along arrangements. These are of widespread use in corporate reality, in particular among private companies. And yet, despite their recurrence in normal practice, they have not to date attracted the interest of the legal literature. The paper intends to confirm the validity of three essential intuitions about these arrangements that redefine the ordinary understanding of them. The first is that they constitute 'anti-opportunism' mechanisms inasmuch as they are arrangements in principle designed to respond to ex post conflicts of interest between liquidity and stability. They are, then, contractual tools that aim to protect one shareholder from opportunistic behavior on the part of another in companies where both have made heavy specific investments. These clauses are particularly pertinent in settings such as joint ventures or venture capital companies, which tend to involve such investments. The second intuition is that these arrangements constitute self-defence tools that are, additionally, relatively self-enforceable. Specifically, self-defence adopts the form of a put option in tagalong arrangements or a call option in drag-along arrangements, to the benefit of shareholders exposed to expropriation risk. These tools are relatively self-enforceable because their implementation entails no third-party involvement. The third intuition is that their typical location is that of shareholders' agreements and not bylaws, since they define inter-shareholder relations (involving all or some of them) rather than corporate structure or machinery. [ABSTRACT FROM AUTHOR]

The article discusses venture capital (VC) and trends in its availability to the health-care industry. With the global economic crisis, VC firms are favoring investments in existing portfolios rather than in start-up ventures or so-called seed financing. VC firms also have smaller reserves of investment resources since mid-2008. Fund raising among VC firms has become a challenge. The article mentions four major events of financing medical technology in the third quarter of 2008, including ongoing deals, and specific VC firms and recipients involved. The article notes that all health-care VC firms are rethinking their policies for investing in start-up biotech firms. Commentary is given on anticipated shifts in medical venture investing in 2009.

The article discusses the role that venture capitalists play in taking scientific innovations from theoretical concepts to commercial realities. They provide financing and advice to companies with potentially successful technologies and products. The average day of an investment professional at a venture capital firm incorporates evaluating investment opportunities, negotiating terms for investments, and potentially even taking an operational role in a start-up company. Activities of the firm Thomas, McNerney & Partners are discussed.

The author reflects on a consortium of several pharmaceutical companies. He offers an example of Enlight Biosciences, a research and development (R&D) startup that focuses on generating tools for drug discoveries. He suggests that the three pharmaceutical companies, Merck & Company Inc., Pfizer Inc., and Eli Lilly and Company who are backed by venture capitalist company PureTech, will be the first of its kind to offer enabling technologies while making a profit.

The article focuses on the progress of biotech companies and economic growth in Denmark. The article discusses that the collaboration of powerful research laboratories and pharmaceutical companies with the local biotech companies backed by efficient management has caused the development of the country. A list of biotech companies in Denmark that are financed by international venture capital is also presented.

The article reports on the Internet-related services provider Google's announcement related to launch of its venture capital arm Google Ventures, which will invest on European companies including life sciences firms.

Several charts and graphs are presented related to the stock performance of the biotech industry in the financial markets which include global biotech initial public offerings, global biotech industry financing, and global biotechnology venture capital investment.

The article reports that venture capital (VC) firms have started to demand post-marketing control plans from companies seeking funding. VC firms are increasingly using the Risk Evaluation and Mitigation Strategy (REMS) planning requirement introduced by the Food and Drug Administration Amendments Act (FDAAA) of 2007. REMS is expected by investors to help expedite approval and extend the market exclusivity of a product.

The article states that the internet company Google has begun a corporate venture capital arm named Google Ventures that will be managed by the entrepreneurs Rich Miner and Bill Maris. It is anticipated that the firm will provide private equity to industries such as healthcare and biotechnology. Google spokesperson Andrew Pederson provides quotes.

The article discusses the abrupt closing of the firm Codon Devices, which specialized in the industrial applications of synthetic biology. The company was backed by strong venture capitalists and had enjoyed a promising beginning; however, its two-pronged approach may have been its demise. Codon was both providing synthetic genes and reagents to order, and intended to partner with other firms to develop applications.

The article discusses the 2008 MoneyTree report by the consulting firm PricewaterhouseCoopers which conducted a 2008 surveyed regarding the activity of venture capitalists. Topics include a chart showing the amount in dollars of U.S. investments from 1998 through 2008 and a discussion regarding the success of investors in the clean technology sector versus those in the biotechnology sector. Statistics related to the amount of money venture capitalists raised in 2008 is presented.

The article presents a profile of a young entrepreneur, Daphne Zohar, founder and managing partner of PureTech Ventures, a Boston-based life sciences venture firm. Zohar states that integrating people, technology and money is a challenging task for business people. The article also discusses the challenge faced by venture capitalists in raising money in the early stages of forming a company. Views of several industrialists' including Norm Selby and Noubar Afeyan is also presented.