The main objective of the present paper is to investigate differences in the design of contracts between venture capitalists and their portfolio firms across venture capital (VC) types. By controlling for selection effects, we focus on contract design differences which reflect differences in...

Using a detailed German data set on venture capital contracts, the authors document that contracts between venture capitalists (VC) and their portfolio firms specify more complete conditions for future financing for firms that do have no suitable outside financing option and therefore lower ex...