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Venture Capital, Agency Costs, And The False Dichotomy Of The Corporation, Robert P. Bartlett
Venture Capital, Agency Costs, And The False Dichotomy Of The Corporation, Robert P. Bartlett
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An implicit dichotomy of the corporation exists in legal scholarship. On one side of the dichotomy rests the publicly held corporation suffering from a significant conflict of interest between its managers and dispersed shareholders; on the other side, the closely held corporation plagued by intershareholder conflict. This Article argues that understanding the agency problems that can exist within a firm demands a rejection of this traditional dichotomy and the theories of the firm built upon it. Using venture capital (VC) finance, this Article demonstrates how this dichotomy obscures how all firms -- public and private -- often face the same …