This paper characterizes the relationship between entrepreneurial wealth and aggregate investment under adverse … analysis: (i) pooling equilibria, in which investment is independent of entrepreneurial wealth, are more likely to arise when … entrepreneurial wealth is relatively low; (ii) separating equilibria, in which investment is increasing in entrepreneurial wealth, are …

screen entrepreneurs both through the amount of investment undertaken and through the level of entrepreneurial net worth. I … seem “lax” (“tight”) and investment is high (low). Differently from the existing literature, my model does not require … entrepreneurial net worth to be counter cyclycal or inconsequential for determining aggregate investment. …