TheNewExitinVentureCapital-January2012paper教程.pdf

VANDERBILT LAW REVIEW _________________________________________________________________ VOLUME 65 JANUARY 2012 NUMBER 1 _________________________________________________________________ The New Exit in Venture Capital Darian M. Ibrahim INTRODUCTION 2 I. THE ECONOMIC PROBLEM OF LOCK-IN IN VENTURE CAPITAL 6 A. Locking in Capital or Investors? 6 B. The More Extreme Investor Lock-in in Venture Capital 8 II. SECONDARY MARKETS IN VENTURE CAPITAL: DESCRIPTION AND FRAMEWORK FOR ANALYSIS 15 A. The Secondary Market for Start-up Stock (the Direct Market) 16 B. Benefits of the Direct Market 20 1. Increasing Liquidity 21 2. Improving Start-up Governance 24 3. Mitigating VC-Entrepreneur Conflicts Over Traditional Exits 27 C. The Direct Market’s Potential to Mute High- Powered Incentives 30  Associate Professor, University of Wisconsin Law School. My thanks to Bobby Bartlett, Brian Broughman, Vic Fleischer, Joan Heminway, Doug Moll, Donna Nagy, Larry Ribstein, Bill Sjostrom, and Gordon Smith for their helpful comments. I thank Wisconsin law students Megan Arrogante, Adrienne Blais, and Angela Brickl and Wisconsin law librarian Cheryl O’Connor for valuable research assistance. Special thanks to the participants in secondary markets who agreed to be interviewed for this project. My promises of anonymity prevent me from naming them here, but their insights were crucial to understanding this emerging market activity. Finally, I thank participants at the Searle-Kauffman Institute on Law, Innovation, and Growth at Chapman