This is the accepted version of the paper.This version of the publication may differ from the final published version. Permanent repository link AbstractThis paper provides a comprehensive theoretical and empirical literature review of venture capital contracts. The paper outlines differences between theoretical and practical uses of contract designs, that is, (1) how does the choice of securities give rise to different adverse selection problems in terms of attracting different types of entrepreneurial companies; How does the choice of securities in conjunction with cash flow and control rights provisions affect (2) the effort levels by the entrepreneur and the investor; and (3) ultimately affect entrepreneurial outcomes. The paper highlights the major discrepancies between theory and practice and points out potential avenues for further research.3