Information Governance and Legal Frameworks of Venture Capital Firms: A Comparative Analysis for Innovation and Knowledge Economy Development

Abstract

Venture capital (VC) firms are central actors in modern innovation ecosystems, functioning within highly information-dependent investment settings that rely on legal precision, regulatory transparency, and strong institutional trust. This study explores the regulation of VC firms through the lens of information governance and legal–information systems, with a specific focus on the Jordanian legal framework alongside selected comparative jurisdictions, namely the United States, Saudi Arabia, and Algeria. It analyses the organisational and legal structure of VC entities, their function in funding high-risk entrepreneurial ventures, the legal consequences generated by their operations, obligations related to information governance, internal governance arrangements, and procedures governing investment exit mechanisms. Methodologically, the research applies descriptive, analytical, and comparative legal approaches to examine Jordanian legislation in contrast with international practices. In this framing, legal instruments and regulatory procedures are treated as structured informational assets that shape investment choices, institutional coordination, and broader knowledge-based economic development. The findings indicate that effective VC environments depend not only on fiscal or investment incentives but, more critically, on robust legal–information infrastructures. These include coherent documentation systems, transparent information governance duties, effective regulatory oversight of information flows, and accessible procedural frameworks. In contrast, the Jordanian framework is characterised by unclear legal information, fragmented documentation and registration systems, weak governance of information processes, insufficient regulation of rights and obligations within information structures, and underdeveloped rules governing investment exit. The study concludes that meaningful reform in Jordan requires establishing a more integrated legal–information ecosystem that enhances regulatory transparency, reduces information asymmetry, strengthens institutional documentation practices, and ultimately supports innovation-led development within the knowledge economy.