The Dynamic Model of Allocation Control in Venture Capital

The allocation of control and stock in venture capital is the key point of the venture capital project. This paper develops a dynamic model of control and stock and profoundly analyses how to allocate the control between the entrepreneur and the venture capitalist. The model reveals the relationship of control and stock's structure, the time and the degree of imparting the control to the entrepreneur or the venture capitalist, the condition of retracting the control and compensation accordingly.