Replacing Management or Not: Contract Renegotiation to Prevent Double Moral Hazards of Venture Capital Investments

<table class="table-group" id="tab2"><tr><td><table class="table"><tr><td class="thead-hr" colspan="4"><hr/></td></tr><tr class="thead"><td class="align_left" rowspan="2"> </td><td class="align_center" colspan="2">In the initial contract</td><td class="align_center">In the renegotiation contract</td></tr><tr class="thead"><td class="align_center">Revenue under <i>A</i><sub><i>s</i></sub></td><td class="align_center">Revenue under <i>A</i><sub><i>r</i></sub></td><td class="align_center">Revenue under <i>A</i><sub><i>r</i></sub></td></tr><tr><td class="thead-hr" colspan="4"><hr/></td></tr><tr><td class="align_left"><span style="width: 17.2065ptpx;"><svg height="8.70527pt" id="M206" style="vertical-align:-0.1802902pt" version="1.1" viewbox="-0.0498162 -8.52498 17.2065 8.70527" width="17.2065pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M517 162C503 123 484 88 467 68C445 42 417 34 341 34C291 34 256 34 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<div>Revenue distributed to <svg height="8.70527pt" id="M204" style="vertical-align:-0.1802902pt" version="1.1" viewbox="-0.0498162 -8.52498 17.2065 8.70527" width="17.2065pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M517 162C503 123 484 88 467 68C445 42 417 34 341 34C291 34 256 34 237 47C219 59 213 81 213 128V317H308C395 317 402 311 415 240H444V431H415C403 364 398 356 307 356H213V584C213 613 215 616 246 616H322C394 616 421 609 435 587C448 566 458 544 467 502L496 506C493 557 488 625 488 650H42V622C120 616 128 612 128 523V125C128 43 120 35 29 28V0H511C520 31 540 125 546 158L517 162Z"></path></g><g transform="matrix(.013,0,0,-0.013,7.384,0)"><path d="M719 650H483V622C553 619 576 606 581 560C585 532 588 487 588 394V148H585L167 650H20V622C67 618 88 610 109 585C127 562 129 557 129 484V264C129 173 126 124 123 93C118 44 92 31 35 28V0H272V28C204 32 181 44 176 95C173 124 170 172 170 264V515H172L598 -9H629V394C629 487 631 532 635 563C639 606 663 619 719 622V650Z"></path></g></svg> and VC in the natural state <span class="nowrap"><svg height="12.5794pt" id="M205" style="vertical-align:-3.29107pt" version="1.1" viewbox="-0.0498162 -9.28833 11.1359 12.5794" width="11.1359pt" xmlns="http://www.w3.org/2000/svg" xmlns:xlink="http://www.w3.org/1999/xlink"><g transform="matrix(.013,0,0,-0.013,0,0)"><path d="M475 507C475 612 440 712 326 712C139 712 23 420 23 215C23 96 58 -12 180 -12C369 -12 475 293 475 507ZM391 522C391 486 387 448 379 394H126C155 538 222 677 310 677C386 677 391 571 391 522ZM373 346C344 193 283 22 189 22C126 22 106 114 106 196C106 243 111 293 118 346H373Z"></path></g><g transform="matrix(.0091,0,0,-0.0091,6.149,3.132)"><path d="M460 334C460 396 434 451 378 451C330 451 241 408 148 300H146L237 679C241 697 241 710 232 710C213 710 153 684 67 675L66 646H95C141 646 145 642 134 595L39 170C23 97 31 54 46 33C64 8 100 -12 137 -12C178 -12 234 3 298 43C391 101 460 222 460 334ZM371 320C371 204 316 89 248 51C230 41 208 37 192 37C143 37 102 72 119 166C124 194 129 215 135 235C202 323 298 392 335 392C353 392 371 372 371 320Z"></path></g></svg>.</span></div>

Scientific Programming

tab2

Table 2

Table 2: Replacing Management or Not: Contract Renegotiation to Prevent Double Moral Hazards of Venture Capital Investments 