Venture capital contracts in Norway : an analytical approach

Abstract

In this thesis we have explored the venture capital market and whether the contractual mechanisms applied in Norwegian venture capital transactions are optimal for minimizing agent-principal costs. From a sample of Norwegian contracts, we extracted a set of the most frequently used contractual mechanisms which we compared to previous research conducted on the US venture capital market and to relevant financial theory. For analytical purposes we divided the mechanisms into two main categories; cash flow rights and control rights. The findings in this paper are that contractual mechanisms applied in Norwegian venture capital transactions contribute to minimize the agent-principal costs, even though there are some possible areas of improvement.