This paper seeks to identify the core of the U.S. venture capital contracting model, and then assess the extent to which the model provides guidance in engineering venture capital markets in other countries and, in particular, in identifying a viable role for government in assisting that project. All financial contracts respond to three central contracting problems: uncertainty, information asymmetry and opportunism in the form of agency costs. The special character of venture capital contracting is shaped by the fact that investing in early stage, high technology companies presents these problems in extreme form. The genius of U.S. venture capital contracting lies in the use of powerful incentives coupled with powerful monitoring for all participants in the process, the braiding of the investor/venture capital fund and venture capital fund/portfolio company contracts, especially with respect to the role of exit and reputation, and the critical role of implicit contracts, especially through the reputation market, to support the dense set of explicit contracts comprising the structure of venture capital contracting. The paper then illustrates the implications of this analysis through consideration of three different government programs - a remarkably unsuccessful early effort in Germany; a more recent, more successful program in Israel; and a newly launched program in Chile.
{"title":"Engineering a Venture Capital Market: Lessons from the American Experience","authors":"R. Gilson","doi":"10.2139/SSRN.353380","DOIUrl":"https://doi.org/10.2139/SSRN.353380","url":null,"abstract":"This paper seeks to identify the core of the U.S. venture capital contracting model, and then assess the extent to which the model provides guidance in engineering venture capital markets in other countries and, in particular, in identifying a viable role for government in assisting that project. All financial contracts respond to three central contracting problems: uncertainty, information asymmetry and opportunism in the form of agency costs. The special character of venture capital contracting is shaped by the fact that investing in early stage, high technology companies presents these problems in extreme form. The genius of U.S. venture capital contracting lies in the use of powerful incentives coupled with powerful monitoring for all participants in the process, the braiding of the investor/venture capital fund and venture capital fund/portfolio company contracts, especially with respect to the role of exit and reputation, and the critical role of implicit contracts, especially through the reputation market, to support the dense set of explicit contracts comprising the structure of venture capital contracting. The paper then illustrates the implications of this analysis through consideration of three different government programs - a remarkably unsuccessful early effort in Germany; a more recent, more successful program in Israel; and a newly launched program in Chile.","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"1 1","pages":"1067-1103"},"PeriodicalIF":4.9,"publicationDate":"2002-12-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2139/SSRN.353380","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68604335","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Ideology and trust: a reply to Bloche.","authors":"Mark A Hall","doi":"","DOIUrl":"","url":null,"abstract":"","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"55 3","pages":"955-67"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"22239482","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"In Search of Fair Housing in Cyberspace: The Implications of the Communications Decency Act for Fair Housing on the Internet","authors":"Jennifer C. Chang","doi":"10.2307/1229678","DOIUrl":"https://doi.org/10.2307/1229678","url":null,"abstract":"","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"55 1","pages":"969-1012"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2307/1229678","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68297497","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
On first reading, I was taken aback, almost stunned, by Gregg Bloche's response to my article. It opens with a story about betrayal of trust by the physician for his dying mother and it closes with the heart-stopping accusation that I am attempting to "remak[e] health law as a tool for limit-setting by deceit,... [which] would lead to downward cycles of anger and distrust, with tragic consequences for medicine's healing potential."l I wondered, what had I done to prompt this depth of outrage and outpouring of accusation and analysis? Had I forgotten what my own article was about? I immediately reread my article to make sure my memory was not playing tricks on me. Then I reread Bloche's response, several times, and thought long and hard about what is really on his mind. Here is what I've concluded.
{"title":"Ideology and trust: a reply to Bloche.","authors":"M. Hall","doi":"10.2307/1229677","DOIUrl":"https://doi.org/10.2307/1229677","url":null,"abstract":"On first reading, I was taken aback, almost stunned, by Gregg Bloche's response to my article. It opens with a story about betrayal of trust by the physician for his dying mother and it closes with the heart-stopping accusation that I am attempting to \"remak[e] health law as a tool for limit-setting by deceit,... [which] would lead to downward cycles of anger and distrust, with tragic consequences for medicine's healing potential.\"l I wondered, what had I done to prompt this depth of outrage and outpouring of accusation and analysis? Had I forgotten what my own article was about? I immediately reread my article to make sure my memory was not playing tricks on me. Then I reread Bloche's response, several times, and thought long and hard about what is really on his mind. Here is what I've concluded.","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"55 3 1","pages":"955-67"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2307/1229677","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68297344","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Getting beyond Affirmative Action: Thinking about Racial Inequality in the Twenty-First Century","authors":"M. Selmi","doi":"10.2307/1229679","DOIUrl":"https://doi.org/10.2307/1229679","url":null,"abstract":"","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"55 1","pages":"1013-1044"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2307/1229679","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68297622","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In the wake of the corporate scandals of the past several months, ISS often receives inquiries as to our views on the two or three key governance changes that-if adopted by all issuers-would help investors to avoid similar market meltdowns in the future.1 Unquestionably, the item on our wish list that draws the blankest stares from corporate America is the call for annual elections of all members of corporate boards. These visceral responses are not surprising given the recent degeneration of the staggered terms versus annual election debate.2 Few governance issues produce the same "Shareholders Are from Mars, Executives Are from Venus" level of disconnect. Simply put, executives and investors view the boardelection timing issue from different perspectives. As is often the case with such genetic-level disagreements, where each group stands is dictated by where its members sit.
{"title":"Classification Cancels Corporate Accountability","authors":"Patrick S. McGurn","doi":"10.2307/1229672","DOIUrl":"https://doi.org/10.2307/1229672","url":null,"abstract":"In the wake of the corporate scandals of the past several months, ISS often receives inquiries as to our views on the two or three key governance changes that-if adopted by all issuers-would help investors to avoid similar market meltdowns in the future.1 Unquestionably, the item on our wish list that draws the blankest stares from corporate America is the call for annual elections of all members of corporate boards. These visceral responses are not surprising given the recent degeneration of the staggered terms versus annual election debate.2 Few governance issues produce the same \"Shareholders Are from Mars, Executives Are from Venus\" level of disconnect. Simply put, executives and investors view the boardelection timing issue from different perspectives. As is often the case with such genetic-level disagreements, where each group stands is dictated by where its members sit.","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"55 1","pages":"839-844"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2307/1229672","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68297016","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence, and Policy,1 Professors Lucian Arye Bebchuk, John C. Coates IV, and Guhan Subramanian (BC&S) purport to demonstrate that hostile takeover targets that have a poison pill rights plan and an "effective" staggered board can-"and most of the time do"2-remain independent rather than sell themselves to the initial raider or another buyer. As presented, their findings turn conventional wisdom on its head and justify, in their view, significant "reconsideration" of the law regarding takeover defenses. Are they on to something here? Should we, indeed, be shocked-shocked!-to lear that takeover defenses work?
在《交错董事会的强大反收购力量:理论、证据和政策》一书中，Lucian Arye Bebchuk、John C. Coates IV和Guhan Subramanian (BC&S)教授试图证明，拥有毒丸权利计划和“有效的”交错董事会的恶意收购目标可以——“大多数时候确实如此”——保持独立，而不是将自己卖给最初的收购者或另一个买家。正如所提出的，他们的发现颠覆了传统智慧，并证明了在他们看来，对有关收购防御的法律进行重大“重新考虑”是合理的。他们有什么发现吗?我们真的应该感到震惊吗?-知道收购防御有效吗?
{"title":"Takeover Defenses Work. Is That Such a Bad Thing","authors":"M. Gordon","doi":"10.2307/1229671","DOIUrl":"https://doi.org/10.2307/1229671","url":null,"abstract":"In The Powerful Antitakeover Force of Staggered Boards: Theory, Evidence, and Policy,1 Professors Lucian Arye Bebchuk, John C. Coates IV, and Guhan Subramanian (BC&S) purport to demonstrate that hostile takeover targets that have a poison pill rights plan and an \"effective\" staggered board can-\"and most of the time do\"2-remain independent rather than sell themselves to the initial raider or another buyer. As presented, their findings turn conventional wisdom on its head and justify, in their view, significant \"reconsideration\" of the law regarding takeover defenses. Are they on to something here? Should we, indeed, be shocked-shocked!-to lear that takeover defenses work?","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"55 1","pages":"819-837"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2307/1229671","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68296974","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The law of corporate reorganizations is conventionally justified as a way to preserve a firm's going-concern value: Specialized assets in a particular firm are worth more together in that firm than anywhere else. This paper shows that this notion is mistaken. Its flaw is that it lacks a well-developed understanding of the nature of a firm. Initially, it is easy to confuse size with specialization and overstate the extent to which assets are dedicated to a particular enterprise. Even when such dedicated assets exist, they often do not need to stay in the same firm. As Coase taught us, as the costs of contracting go down, so too does the value of keeping assets in a particular firm. But even when specialized assets must be kept inside a firm, two other forces limit the need for a traditional law of corporate reorganizations. Capital structures are increasingly designed with financial distress in mind. For these firms, control rights shift from one set of investors to another as the firm encounters difficulty. Such firms either never file for bankruptcy, or, if they do, it is only to vindicate the pre-determined allocation of control rights. Even where control rights are not sensibly allocated, a quick sale of the firm restores order. When firms can be sold as going concerns, the need for the traditional negotiated plan of reorganization disappears. The vast majority of firms in financial distress never enter bankruptcy. Today the Chapter 11 of a large firm is an auction of the assets, followed by litigation over the proceeds. To the extent we understand the law of corporate reorganizations as providing a collective forum in which creditors and their common debtor fashion a future for a firm that would otherwise be torn apart by financial distress, we may safely conclude that its era has come to an end.
{"title":"The End of Bankruptcy","authors":"D. Baird, R. K. Rasmussen","doi":"10.2139/SSRN.359241","DOIUrl":"https://doi.org/10.2139/SSRN.359241","url":null,"abstract":"The law of corporate reorganizations is conventionally justified as a way to preserve a firm's going-concern value: Specialized assets in a particular firm are worth more together in that firm than anywhere else. This paper shows that this notion is mistaken. Its flaw is that it lacks a well-developed understanding of the nature of a firm. Initially, it is easy to confuse size with specialization and overstate the extent to which assets are dedicated to a particular enterprise. Even when such dedicated assets exist, they often do not need to stay in the same firm. As Coase taught us, as the costs of contracting go down, so too does the value of keeping assets in a particular firm. But even when specialized assets must be kept inside a firm, two other forces limit the need for a traditional law of corporate reorganizations. Capital structures are increasingly designed with financial distress in mind. For these firms, control rights shift from one set of investors to another as the firm encounters difficulty. Such firms either never file for bankruptcy, or, if they do, it is only to vindicate the pre-determined allocation of control rights. Even where control rights are not sensibly allocated, a quick sale of the firm restores order. When firms can be sold as going concerns, the need for the traditional negotiated plan of reorganization disappears. The vast majority of firms in financial distress never enter bankruptcy. Today the Chapter 11 of a large firm is an auction of the assets, followed by litigation over the proceeds. To the extent we understand the law of corporate reorganizations as providing a collective forum in which creditors and their common debtor fashion a future for a firm that would otherwise be torn apart by financial distress, we may safely conclude that its era has come to an end.","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"55 1","pages":"751-789"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2139/SSRN.359241","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68610688","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In health care law, as in other regulatory spheres, many rules are meant to promote trustworthiness. Market-oriented scholars have long urged that parties be permitted to contract out of such rules. They have argued, on efficiency grounds, for contractual enjoining of clinical decisionmaking authority; relationships among providers and health care payers; and physicians' conflicting obligations to patients, payers, and other third parties. To a large degree, courts and regulators accommodated, clearing a path in the 1980s and 1990s for the rise of managed care. But a growing body of research on the psychology of trust, altruism, and health risk raises doubts about contractual departure from rules meant to reinforce trustworthiness. Rising consumer hostility to managed care cost control methods has lent urgency to these doubts. While some contractarian scholars dismiss these doubts, others, most notably Mark Hall, take them seriously. Drawing upon some of the same empirical studies that have led others to question contractarian prescriptions, Hall argues that consumer trust is robust, indeed often present in excess, and that regulation on trust-related grounds is mostly unnecessary, even counterproductive. I contend in this essay that contractarian prescriptions for health law pose large risks for our health system's trustworthiness. Hall's case to the contrary misreads both the psychological evidence and the import and irony of Americans' backlash against managed care. Because people are uncomfortable, to the point of denial, with health care's cost-benefit tradeoffs, the medical marketplace delivers evasion and euphemism about how these tradeoffs are made. But there is also a thriving market for the exposure of evasion. Regulatory and legal deference to contractual arrangements that ration covertly thus engenders consumer anger and distrust. Rather than tolerating such arrangements, the law should demand contractual honesty as the price for deference to contractual freedom.
{"title":"Trust and betrayal in the medical marketplace.","authors":"M. G. Bloche","doi":"10.2307/1229676","DOIUrl":"https://doi.org/10.2307/1229676","url":null,"abstract":"In health care law, as in other regulatory spheres, many rules are meant to promote trustworthiness. Market-oriented scholars have long urged that parties be permitted to contract out of such rules. They have argued, on efficiency grounds, for contractual enjoining of clinical decisionmaking authority; relationships among providers and health care payers; and physicians' conflicting obligations to patients, payers, and other third parties. To a large degree, courts and regulators accommodated, clearing a path in the 1980s and 1990s for the rise of managed care. But a growing body of research on the psychology of trust, altruism, and health risk raises doubts about contractual departure from rules meant to reinforce trustworthiness. Rising consumer hostility to managed care cost control methods has lent urgency to these doubts. While some contractarian scholars dismiss these doubts, others, most notably Mark Hall, take them seriously. Drawing upon some of the same empirical studies that have led others to question contractarian prescriptions, Hall argues that consumer trust is robust, indeed often present in excess, and that regulation on trust-related grounds is mostly unnecessary, even counterproductive. I contend in this essay that contractarian prescriptions for health law pose large risks for our health system's trustworthiness. Hall's case to the contrary misreads both the psychological evidence and the import and irony of Americans' backlash against managed care. Because people are uncomfortable, to the point of denial, with health care's cost-benefit tradeoffs, the medical marketplace delivers evasion and euphemism about how these tradeoffs are made. But there is also a thriving market for the exposure of evasion. Regulatory and legal deference to contractual arrangements that ration covertly thus engenders consumer anger and distrust. Rather than tolerating such arrangements, the law should demand contractual honesty as the price for deference to contractual freedom.","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"55 3 1","pages":"919-54"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2307/1229676","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68297030","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
INTRODUCTION 1045 I. IN SIDE B A SEBALL 1046 II. T H E N L R B 1052 III. CHAIRMAN GOULD AND HIS CRITICS . .... 1060
在b面有一个球。这是我们在1952年的第一次见面。主席古尔德和他的批评者. ....1060
{"title":"Inside Baseball at the NLRB: Chairman Gould and His Critics","authors":"M. J. Goldberg","doi":"10.2307/1229680","DOIUrl":"https://doi.org/10.2307/1229680","url":null,"abstract":"INTRODUCTION 1045 I. IN SIDE B A SEBALL 1046 II. T H E N L R B 1052 III. CHAIRMAN GOULD AND HIS CRITICS . .... 1060","PeriodicalId":51386,"journal":{"name":"Stanford Law Review","volume":"48 1","pages":"1045-1066"},"PeriodicalIF":4.9,"publicationDate":"2002-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.2307/1229680","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"68297644","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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