Mar 20, 2015 By: admin
Dr. S. Abraham Ravid, professor of finance at the , will publish an article in . Titled 鈥淟ocation Specific Styles and U.S. Venture Capital Contracting鈥 and co-authored by Ola Begntsson of Lund University, the article documents a study that found significant differences between start-up contracts in California and similar contracts in other states. Across 1,804 contracts, Ravid鈥檚 study found that California-based entrepreneurs received more lenient contract terms: venture capitalists in California firms agreed to less protection should a project fail compared to those in other states. This 鈥淐alifornia effect鈥 remained significant even after Ravid and Begntsson controlled for all other relevant factors. Similar effects were found when VCs were located in California, and most surprisingly, even for a non-California VC who had had a large exposure to the California market in the past.
