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The Venture Capital Representative Director: Navigating the Fiduciary Obligations

The worldwide collapse of real estate and capital markets, seizure of the credit markets and continuing deterioration of the global economy has touched on every business sector. This downturn has reversed the resurgence of venture capital from both public and private sources that went into start-up ventures and which helped reinvigorate the incentive for entrepreneurial innovation and collaborative developments in 2007. With the bursting of the dot.com bubble fading from memory, venture capitalists invested in $29.4 billion in 3,813 deals in 2007, the largest investment total since 2001. In contrast, 2008 marked the first yearly decline in total investments since 2003. In these difficult economic times, venture capitalists should learn from the lessons of the fall-out of the dot.com boom and recent developments in the marketplace to take appropriate precautions to protect themselves, as best as possible.

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