This paper examines corporate governance in management buy-outs and buy-ins and in particular considers the problems faced by venture capitalists as active investors. Evidence is presented based on large scale surveys and case studies. The study suggests the importance of achieving a balance between the independence of venture capitalists as monitors of management and the need for cooperation in their relationships with managers in buy-outs and buy-ins. The study also questions the adequacy with which financiers as active investors have taken account of the differing attributes of each type of transaction, particularly in relation to access to information and the roles of management. The costs of closely monitoring smaller investments may often exceed the benefits, which helps explain why the greater control found in buy-ins is more likely to be indirect rather than greater board representation. The evidence suggests the need for a flexible approach to governance under which the forms adopted take account of the specific circumstances of a particular enterprise.