Der Markt für Venture Capital: Anreizprobleme, Governance Strukturen und staatliche Interventionen

In this paper we give an overview, with special emphasis on Germany, of the recent development of the market for venture capital. We analyse the financial contracting problems that arise when entrepreneurs need capital from outside investors, and demonstrate how these problems are addressed by the institutions and contracts observed in the market for venture capital. Finally, we discuss the arguments in favour of government subsidies for private R and D, and argue that there are positive incentive effects if these subsidies are given to venture capital financed projects, rather than to established firms.