Bergemann, Dirk; Hege, Ulrich; Peng, Liang - Cowles Foundation for Research in Economics, Yale University - 2008
We present a dynamic model of venture capital financing, described as a sequential investment problem with uncertain … the speed of the investment and the optimal path of staged investments. We derive the dynamically optimal funding policy … period of 1987-2002. First, the investment flow starts low if the failure risk is high and accelerates as the projects mature …