Remove Firm-specific Risk Remove Specific Risk Remove Start-ups
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Risk-Seeking Corporate Governance

Reynolds Holding

At the same time, startups are taking unprecedented risks – defying regulators, growing in unsustainable ways, and racking up billion-dollar losses. Founders may be reluctant to take on so much risk. In our model, VCs address the divergence in risk preference by striking an implicit bargain with founders.

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