Venture capital funds want to invest in innovative startups


Question: Please answer the following questions about VC funds.

a) Venture capital funds want to invest in innovative startups. Why should VC manager care about agency theory? What is agency theory about?

(b) Venture capital funds invest in startups. Why are convertible preferred securities so prevalent in such investments?

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Finance Basics: Venture capital funds want to invest in innovative startups
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