3CL Seminar: 'Venture Capital and European Corporate Laws: Bargaining in the Shadow of Regulatory Constraints'

Speaker: Professor Luca Enriques (University of Oxford)

The venture capital (“VC”) industry and its managers – a.k.a. venture capitalists – have built a solid reputation for spurring innovation and economic growth, emerging as one of the crown jewels of the US economy in the 1980s and thus rather quickly turning into a dream for policymakers globally.

VC-driven value creation does largely rest on a very peculiar capital management process, which in turn requires, inter alia, the adoption of a very complex contractual technology at the VC-backed firm level. Consistent with the predictions of financial contracting theory, this contractual technology seeks to address the multiple market imperfections inherent in the financing of high-tech firms, as well as braiding the existential logic of VC-backed firms with the VC business model’s idiosyncratic organizational and operational features. Corporate law’s relatively flexible or rigid design can affect the adoption of this contractual technology and its overall functionality, thus ultimately emerging, at the margin, as a determinant of contract formation and hence overall VC investment levels.

Building on this conceptual framework, this seminar compares and contrasts VC contracting under the corporate law regimes in force in the US – say, Delaware – and two major European jurisdictions – namely, Germany and Italy. The discussion warrants one conclusion. To the extent that corporate law matters for the purposes of attracting VC investments, European corporate laws have the potential to deter, at the margin, VC investments, generating a competitive disadvantage that can contribute to account for the existing transatlantic gap in VC activity.

Biography: Luca Enriques is the Professor of Corporate Law at the University of Oxford Faculty of Law, a Research Fellow at the European Corporate Governance Institute (where he also chairs the Research Committee and is a member of the board) and a Fellow Academic Member of the European Banking Institute (where he also co-chairs the Fintech Working Group). He has published widely in the fields of comparative corporate law, securities regulation and banking law.

He has held visiting positions, among others, at Harvard Law School (as Nomura Professor of International Financial Systems in 2012-13), IDC Herzliya, the University of Cambridge Faculty of Law and Sydney Law School. Between 2007 and 2012 he was a commissioner at Consob, the Italian securities market authority. Before joining the Oxford Faculty of Law, he was Professor of Law at the University of Bologna (2002-07) and at LUISS Guido Carli University in Rome (2013-14), and a consultant to Cleary, Gottlieb, Steen & Hamilton (2003-07). He has also advised the Italian Ministry of the Economy and Finance on corporate and financial markets policy issues throughout the years.

He holds a Degree in law at the University of Bologna, an LLM at Harvard Law School and a Doctorate in Business Law at Bocconi University in Milan.

3CL runs the 3CL Travers Smith Lunchtime Seminar Series, featuring leading academics from the Faculty, and high-profile practitioners.

Enquiries to: 3cl@law.cam.ac.uk