Analysis Of The Founder's Allocation Of Corporate Control Under The Background Of The Venture Capitalists' Withdrawal

Under the background of "mass entrepreneurship and innovation"strongly supported by the state policy,more "dual-venture" companies will appear in the future.In recent years,more and more start-up companies seek the help of the venture capitalists in financing.However,when venture capital exit from the start-up companies,the competition for control rights of the start-up companies and the leaving events of the founders make the allocation of control rights,which are between the venture capitalists and the founders,carry more weight in academic and business practice.This paper takes the control contest of ATHM,which is a highly successful company in the industry,as a case to study the above problems.Three years after the initial public offerings,the founders together with the original team were swept out by the new large shareholders after the withdrawal of the venture capitalists.This event is more open and typical,and has some research value.On the basis of the observation of the external environment and internal structure of the company,this paper establishes an analytical framework on how to ensure the founder's control rights in the context of the withdrawal of venture capitalists.The author consults predecessor's literature,make use of single case study and combines with ATHM's actual situation to finish this paper.The paper analyzes from three main aspects.(1)The study finds that there are some issues of setting up shares.This paper analyzes the passive situation of ATHM after the venture capital withdrawal from the perspective of the danger of shares setting and the absence of the control right maintenance system.(2)The study focuses on the topic of ATHM's real control.Probe into the real reason of the contention between venture capitalist and founders through the board of director centralism,the restriction of wealth constraints and etc.(3)Other problems.The study analyzes other factors causing the contention through the external supervision and founders,own problems.By analyzing the ATHM's control contest,this paper wants to figure out how to ensure the founders not lose control of start-up companies when venture capitalists exit.To provide some references on how to avoid the same mistakes of such controversy of control rights for the new start-ups when they face such problems.