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The (Not So) Puzzling Behavior Of Angel Investors, Darian M. Ibrahim
The (Not So) Puzzling Behavior Of Angel Investors, Darian M. Ibrahim
Darian M Ibrahim
Angel investors fund start-ups in their earliest stages, which creates a contracting environment rife with uncertainty, information asymmetry, and agency costs in the form of potential opportunism by entrepreneurs. Venture capitalists also encounter these problems in slightly later-stage funding, and use a combination of staged financing, preferred stock, board seats, negative covenants, and specific exit rights to respond to them. Curiously, however, traditional angel investment contracts employ none of these measures, which appears inconsistent with what financial contracting theory would predict. This Article explains this (not so) puzzling behavior on the part of angel investors, and also explains the recent …
Individual Or Collective Liability For Corporate Directors?, Darian M. Ibrahim
Individual Or Collective Liability For Corporate Directors?, Darian M. Ibrahim
Darian M Ibrahim
Fiduciary duty is one of the most litigated areas in corporate law and the subject of much academic attention, yet one important question has been ignored: Should fiduciary liability be assessed individually, where directors are examined one-by-one for compliance, or collectively, where the board’s compliance as a whole is all that matters? The choice between individual and collective assessment may be the difference between a director’s liability and her exoneration, may affect how boards function, and informs the broader fiduciary duty literature in important ways. This Article is the first to explore the individual/collective question and suggest a systematic way …