Selected Research

Beyond Wall Street: Inside the Legal Battles of Private Companies

Jessica Erickson, Beyond Wall Street: Inside the Legal Battles of Private Companies, 50 J. Corp. L. 397 (2025).

Drawing on hand-collected data from more than 700 private-company lawsuits filed in 31 U.S. states and territories, this article presents the first empirical study of litigation between the owners of private companies. The author finds that private-company disputes differ in important respects from their public-company counterparts, with claims of self-dealing, freeze-outs, dilution of ownership interests, and unlawful competition appearing more frequently than in the public-company context.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5136675

Unicorn Shareholder Suits

Verity Winship, Unicorn Shareholder Suits, 100 Ind. L.J. 1 (2024).

Drawing on an original empirical study of shareholder litigation against U.S. private companies valued at one billion dollars or more, this article examines how shareholder suits in the unicorn context differ from shareholder litigation against public companies. It identifies barriers facing private-company investors, analyzes the routes that remain available to litigants, and evaluates the extent to which shareholder litigation can serve a policing function in large private firms.

https://www.repository.law.indiana.edu/ilj/vol100/iss1/1/

Does Reputation Limit Opportunistic Behavior in the VC Industry? Evidence from Litigation Against VCs

Vladimir Atanasov, Vladimir Ivanov & Kate Litvak, Does Reputation Limit Opportunistic Behavior in the VC Industry? Evidence from Litigation Against VCs, 67 J. Fin. 2215 (2012).

Using a hand-collected database of lawsuits against venture capitalists, this article examines the role of reputation in limiting opportunistic behavior toward entrepreneurs, investors, other VCs, and acquirers of VC-backed startups. The authors find that more reputable VCs are less likely to be litigated and that litigated VCs experience subsequent declines in business activity, with effects more pronounced for repeat defendants and for cases brought by entrepreneurs.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1343981

“Don’t Go Chasing Waterfalls”: Fiduciary Duties in Venture-Capital-Backed Start-Ups

Sarath Sanga & Eric L. Talley, “Don’t Go Chasing Waterfalls”: Fiduciary Duties in Venture-Capital-Backed Start-Ups, 53 J. Legal Stud. 21 (2024).

This article develops a formal economic model of contracting between founders, who hold common stock, and venture capital investors, who hold convertible preferred stock. The authors use the model to evaluate the line of judicial precedents they term the “Trados doctrine” and to examine how capital structure, corporate governance, and legal liability rules together affect firm value, with particular attention to incentive misalignments around liquidation preferences and conversion points.

https://chicagounbound.uchicago.edu/jls/vol53/iss1/2/

Control and Its Discontents

Jill E. Fisch & Steven Davidoff Solomon, Control and Its Discontents, 173 U. Pa. L. Rev. 641 (2025).

This article analyzes a series of recent Delaware decisions reflecting growing judicial skepticism toward corporate actions in controlled companies, including the application of fiduciary duties and entire-fairness review to “new” control situations. The authors argue that strict scrutiny of controlling shareholders acting in their capacity as shareholders is economically unnecessary and impractical outside the freeze-out context, and propose greater deference to existing market and contractual protections.

https://pennlawreview.com/2025/02/21/control-and-its-discontents/

Risk-Seeking Governance

Brian J. Broughman & Matthew T. Wansley, Risk-Seeking Governance, 76 Vand. L. Rev. 1299 (2023).

This article proposes a model of venture capital behavior in which VCs use their role in corporate governance to encourage risk-averse founders to pursue high-risk strategies, departing from the traditional “monitoring” account that has dominated corporate law scholarship. The authors examine the founder-friendly concessions that have become more common in venture financing and consider their implications for governance, oversight, and stakeholders outside the VC-founder bargain.

https://scholarship.law.vanderbilt.edu/vlr/vol76/iss5/1/

Startup Governance

Elizabeth Pollman, Startup Governance, 168 U. Pa. L. Rev. 155 (2019).

This article provides a framework for analyzing the governance of venture-backed startups, identifying the vertical and horizontal tensions that arise among founders, investors, executives, and employees as such companies grow. It argues that traditional principal-agent and controlling-shareholder paradigms do not capture key features of startup governance, and considers how these dynamics affect monitoring, oversight, and the decision to go public.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3352203

Opportunity-Cost Conflicts in Corporate Law

Abraham J.B. Cable, Opportunity-Cost Conflicts in Corporate Law, 66 Case W. Rsrv. L. Rev. 51 (2015).

This article introduces the concept of the “opportunity-cost conflict” as a distinct form of fiduciary loyalty claim, arising when a fiduciary operates under strong incentives to withdraw human and financial capital for redeployment into new investment opportunities. The framework has its roots in the venture capital context, where directors affiliated with VC funds may face incentives to wind down viable startups in favor of more promising portfolio companies, and provides a lens for analyzing related conflicts across corporate law.

https://scholarlycommons.law.case.edu/caselrev/vol66/iss1/4/

Startup Failure

Elizabeth Pollman, Startup Failure, 73 Duke L.J. 327 (2023).

This article develops a theory of how law and culture have shaped the system for handling venture-backed startups that do not reach a successful exit. It examines why bankruptcy law generally does not fit the needs of distressed startups and analyzes the alternative mechanisms — including soft-landing acquisitions, acqui-hires, and assignments for the benefit of creditors — through which entrepreneurs, investors, employees, and creditors navigate failure outside the formal insolvency system.

https://scholarship.law.duke.edu/dlj/vol73/iss2/2/

Private Company Lies

Elizabeth Pollman, Private Company Lies, 109 Geo. L.J. 353 (2020).

This article examines securities fraud in private companies through the lens of Rule 10b-5 and considers why private-market enforcement has lagged public-market enforcement despite the explosive growth of private capital. It analyzes the structural conditions in late-stage private companies that may foster misconduct and deception and considers the regulatory and enforcement implications of this gap.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3551565