Iranian Economic Review

Iranian Economic Review

Characteristics of Venture Capitalists and Contractual Covenants: An Analysis of the Iranian Venture Capital Market

Document Type : Research Paper

Authors
Ali Nazemi 1
Farshad Khodayari Ghozloo 1
Mohammadsadegh Khayatian 2
1 Department of Economics, Kharazmi University, Tehran, Iran.
2 Institute for Science and Technology Studies, Shahid Beheshti University, Tehran, Iran.
10.22059/ier.2024.366082.1007818
Abstract
This research was motivated by the need to illuminate the relationship between the characteristics of a venture capitalist and the types of covenants used in the preparation of an investment contract. Accordingly, we set out to gain a better understanding of venture capitalists’ attitudes toward the structures of their investment contracts on the basis of investment characteristics such as the age of a venture capital fund, their preferences for early or later stage investments, the number of investments made, and the size of a fund portfolio. The study involved 36 venture capitalist members of the Iranian Venture Capital Association, from whom data were collected through structured questionnaires combined with personal interviews. The twenty-one separate contractual covenants were then examined through cluster analysis, analysis of variance, and logistic regression. The findings reveal that experienced venture capitalists tend to prioritize control rights and rights to return streams in their contracts. The study contributes to the understanding of venture capital contracting practices and offers insights for venture capitalists, entrepreneurs, and policymakers in Iran and beyond.
Keywords
economics of contract
entrepreneurship
investment decisions
property rights
venture capital.
Subjects
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Iranian Economic Review
Volume 30, Issue 3
Summer 2026
Pages 984-1008