Corporate Governance

The authors would like to thank Harry DeAngelo, Todd Henderson, James Spindler, Robert Thompson, Charles Whitehead, the Harvard Law School Faculty Workshop, the University of Pennsylvania Law School Business Law Scholarship Workshop, and the participants of The University of Chicago Symposium, The Going-private Phenomenon: Causes and Implications, for their helpful comments.

The initial research for this Article was conducted while I was an Olin Fellow in Law and Economics at Columbia Law School. I would like to thank Bernie Black, John Donohue, Merritt Fox, Ron Gilson, Victor Goldberg, Jeff Gordon, Zohar Goshen, Michael Guttentag, Todd Henderson, Michael Jensen, Steven Kaplan, Michael Klausner, Ed Rock, Jeff Strnad, Susan Woodward, the editors of The University of Chicago Law Review, and participants in The Going-private Phenomenon: Causes and Implications, the annual meeting of the American Law and Economics Association, and the Columbia Law School Blue Sky Lunch for comments. I especially thank the venture capitalists, venture capital lawyers, and representatives of institutional investors who were willing to answer my questions and in some cases provide the limited partnership agreements that are the focus of this Article. Those who have given me permission to name them include: Steven Anderson at Kleiner Perkins Caufield & Byers; Alan Austin at Silver Lake Partners; Micah Avni of Jerusalem Global Ventures; Jonathan Axelrad at Wilson Sonsini Goodrich & Rosati; Thomas Beaudoin at Testa, Hurwitz & Thibeault; Bill Campbell at Ater Wynne; Craig Dauchy at Cooley Godward Kronish; Ken DeAngelis at Austin Ventures; Alex Gould at Stanford Law School; Ryan Lester, formerly at O’Melveny & Myers; Andrei Manoliu; J.B. Pritzker; John Quigley at Nassau Capital; and Mark Tanoury at Cooley Godward Kronish. I owe special thanks to Susan Woodward at Sand Hill Econometrics for sharing data on VC performance with me.

Thanks to Robert Bartlett, Lucian Bebchuk, Richard Epstein, Larry Ribstein, Amanda Rose, and other participants in the Symposium, The Going-private Phenomenon: Causes and Implications at The University of Chicago Law School. Ching-Tang Chen, Joey Hipolito, Alex Jadin, Amad Judeh, Thomas King, I-Jung Lee, and Tal Niv provided extremely valuable research assistance. I am also thankful to Larry Goldstein of Santa Monica Partners for helpful conversations on the challenges faced by investors in firms that have gone dark. Financial support from the Boalt Hall Fund is gratefully acknowledged.

I want to thank my colleagues Charles Wu, Nina Flax, and Daniel Horwood for their assistance on this Article and Jessica Waller, one of my students, whose paper was a helpful resource. I also want to thank Robert Helman and Frederick Thomas for their comments.

Thanks to Kelli Alces, Douglas Baird, William Birdthistle, Rosalind Dixon, Bernard Harcourt, Lee Fennell, William Landes, Anup Malani, Jonathan Masur, Richard McAdams, Martha Nussbaum, Randy Picker, Eric Posner, David Strauss, Vova Shklovsky, David Weisbach, and David Yosifon for helpful suggestions. Rebecca Fike, Nicholas Lawhead, and Ruben Rodrigues provided excellent research assistance.

I am grateful to Don Langevoort, Adam Pritchard, and Hillary Sale for helpful comments on an earlier draft.

We are grateful for comments we received at the 2016 Annual Meeting of the American Law and Economics Association, the Eleventh Annual Conference on Empirical Legal Studies, and at presentations at Florida State University College of Law, Fordham Law School, Notre Dame Law School, St. John’s University School of Law, UCLA School of Law, USC Gould School of Law, and Young Conaway Stargatt & Taylor, LLP. Thanks also to Jennifer Arlen, Alon Brav, Jack Coffee, Elisabeth de Fontenay, Chris Foulds, Joe Grundfest, Victoria Ivashina, J. Travis Laster, Katie McCormick, Darius Palia, Frank Partnoy, Richard Squire, Leo Strine, and Eric Talley for comments and conversations on earlier drafts. The viewpoints and any errors herein are the authors’ alone.