9.2. The Contractual Package
The “contractual package” defines the commitment of the equity investor to the venture-backed company. It impacts and sustains value creation and allocates duties and rights between the equity fund and the venture-backed company.
The contract facilitates management and control and identifies the proper combination between risk and return. Contract design is developed through three different approaches:
- Liability profile
Each approach is broken down in Figure 9.5.
Figure 9.5. The contractual package.
The first approach is by targeting an investment vehicle; the valuation of the alternative ...