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Venture Capitalists as Principals : Contracting, Screening, and Monitoring
Kaplan, Steven N. - 2010
. Theory has identified three primary ways that the investor / principal can mitigate these conflicts - structuring financial … work and its relation to theory for one prominent class of principals venture capitalists (VCs). The empirical studies … indicate that VCs attempt to mitigate principal-agent conflicts in the three ways suggested by theory. The evidence also shows …
Persistent link: https://www.econbiz.de/10012763175
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Venture Capital Contracts
Ewens, Michael - 2019
We estimate the impact of venture capital (VC) contract terms on startup outcomes and the split of value between the entrepreneur and investor, accounting for endogenous selection via a novel dynamic search and matching model. The estimation uses a new, large data set of first financing rounds...
Persistent link: https://www.econbiz.de/10012865753
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The Burden of the Nondiversifiable Risk of Entrepreneurship
Hall, Robert E. - 2014
In the standard venture capital contract, entrepreneurs have a large fraction of equity ownership in the companies they found and are paid a sub-market salary by the investors who provide the money to develop the idea. The big rewards come only to those whose companies go public or are acquired...
Persistent link: https://www.econbiz.de/10012751344
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Synergizing Ventures
Akcigit, Ufuk - 2019
Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC-backing increases a startup's likelihood of reaching the right tails of the firm size and...
Persistent link: https://www.econbiz.de/10012863701
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Cost of Experimentation and the Evolution of Venture Capital
Ewens, Michael - 2018
We study how technological shocks to the cost of starting new businesses have led the venture capital model to adapt in fundamental ways over the prior decade. We both document and provide a framework to understand the changes in the investment strategy of venture capitalists (VCs) in recent...
Persistent link: https://www.econbiz.de/10012920902
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The Social Value of Financial Expertise
Kurlat, Pablo D. - 2016
I study expertise acquisition in a model of trading under asymmetric information. I propose and implement a method to estimate the ratio of social to private marginal value of expertise. This can be decomposed into three sufficient statistics: traders' average profits, the fraction of bad assets...
Persistent link: https://www.econbiz.de/10012997881
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Why Doesn't Technology Flow from Rich to Poor Countries?
Cole, Harold L. - 2015
control the cash flows of a firm plays an important role in the technology adoption decision. Can such a theory help to …
Persistent link: https://www.econbiz.de/10013030072
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Innovation and the Financial Guillotine
Nanda, Ramana - 2015
Our paper demonstrates that while failure tolerance by investors may encourage potential entrepreneurs to innovate, financiers with investment strategies that tolerate early failure endogenously choose to fund less radical innovations. Failure tolerance as an equilibrium price that increases in...
Persistent link: https://www.econbiz.de/10013035138
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Venture Capital Contracting and Syndication : An Experiment in Computational Corporate Finance
Fluck, Zsuzsanna - 2006
This paper develops a model to study how entrepreneurs and venture-capital investors deal with moral hazard, effort provision, asymmetric information and hold-up problems. We explore several financing scenarios, including first-best, monopolistic, syndicated and fully competitive financing. We...
Persistent link: https://www.econbiz.de/10012783670
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Tax Policy, Venture Capital, and Entrepreneurship
Keuschnigg, Christian - 2006
The paper studies the effects of tax policy on venture capital activity. Entrepreneurs pursue a single high risk project each but have no own resources. Financiers provide equity finance. They must structure the entrepreneur's profit share and base salary to assure their incentives for full...
Persistent link: https://www.econbiz.de/10012783952