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Full-Text Articles in Law
Annual Report 2019-2020, Ira M. Millstein Center For Global Markets And Corporate Ownership
Annual Report 2019-2020, Ira M. Millstein Center For Global Markets And Corporate Ownership
Ira M. Millstein Center for Global Markets and Corporate Ownership
Looking back on the 2019-2020 academic year, we are pleased to reflect on another highly productive period for the Millstein Center.
Don't Go Chasing Waterfalls: Fiduciary Duties In Venture Capital Backed Startups, Sarath Sanga, Eric L. Talley
Don't Go Chasing Waterfalls: Fiduciary Duties In Venture Capital Backed Startups, Sarath Sanga, Eric L. Talley
Faculty Scholarship
Venture-capital-backed startups are often crucibles of conflict between common and preferred shareholders, particularly around exit decisions. Such conflicts are so common, in fact, that they have catalyzed an emergent judicial precedent – the Trados doctrine – that requires boards to prioritize common shareholders' interest and to treat preferred shareholders as contractual claimants. We evaluate the Trados doctrine using a model of startup governance that interacts capital structure, corporate governance, and liability rules. The nature and degree of inter-shareholder conflict turns not only on the relative rights and options of equity participants, but also on a firm's intrinsic value as well …