Was the London Stock Exchange (LSE) little more than a Dickensian den of speculation, or did itmake a contribution to industrial development in interwar Britain? The interwar stock marketlaboured under problems of weak disclosure, inadequate investor protection and ineffectiveunderwriting. New...

Existing literature suggests that entrepreneurs with prior firm-founding experience have moreskills and social connections than novice entrepreneurs. Such skills and social connectionscould give experienced founders some advantage in the process of raising venture capital.This paper uses a large...

This paper examines the German venture capital (VC) syndicate networks and towhat extent certain characteristics of VC companies determine the investors’interconnectedness. The data used contains detailed information on 300 VCinvestments and their investors from the years 2004 and 2005. The...

Informed capital is a crucial ingredient to a well-functioning market for start-upfinance, especially in times of difficult market conditions. For bank-basedsystems, the question regarding which investors actually supply informed capitalhas not yet been answered. To fill this gap, we conduct a...

Using a comprehensive database of European firms, we study how private equityaffects the rate of firm entry. We find that private equity investment benefits newbusiness incorporation, especially in industries with naturally higher entry rates andR&D intensity. A two standard deviation increase...

This study empirically evaluates the price impact of agency risk in firm valuation. Using aunique data set comprised of internal valuation documents, we find that venture capitalistsuse risk discounts to cope with expected agency risks...

We analyse a model of two-sided matching and incentive contracts where expertinvestors (venture capitalists) with different monitoring capacities are matched withfirms with different levels of initial wealth. Firms do not have sufficient start-upcapital to cover their project costs and hence,...

The paper offers a new explanation for the widely observed use of redeemable and convertible preferred stock in venture capital finance. Redeemable and convertible preferred stocks can be used to endogenously allocate cash flow and control rights as a function of the state of nature, the...