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Do VCs use inside rounds to dilute founders? Some evidence from Silicon Valley
Broughman, Brian J.; Fried, Jesse M. - In: Journal of Corporate Finance 18 (2012) 5, pp. 1104-1120
In the bank-borrower setting, a firm's existing lender may exploit its positional advantage to extract rents from the firm in subsequent financings. Analogously, a startup's existing venture capital investors (VCs) may dilute the founder through a follow-on financing from these same VCs (an...
Persistent link: https://www.econbiz.de/10011052898
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The Importance of Trust for Investment : Evidence From Venture Capital (Revision of DP 2009-43)
Da Rin, Marco; Bottazzi, L.; Hellmann, T. - Tilburg University, Center for Economic Research - 2010
We examine the effect of trust on financial investment and contracting decisions in a micro-economic environment where trust is exogenous. Using hand-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects investment...
Persistent link: https://www.econbiz.de/10011090711
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Relational contract theory and management contracts: A paradigm for the application of the Theory of the Norms
Diathesopoulos, Michael - Volkswirtschaftliche Fakultät, … - 2010
This paper examines management contracts as a paradigm for the application of relational contracts theory and especially of the theory of contractual and relational norms. This theory, deriving from Macauley's implications, but structured and analysed by I.R. MacNeil gives us a framework for the...
Persistent link: https://www.econbiz.de/10008599121
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Measuring the Effect of Bankruptcy Laws on Entrepreneurship Across Countries
Cumming, Douglas J. - In: Journal of Entrepreneurial Finance 16 (2012) 1, pp. 80-86
entrepreneurship to personal bankruptcy law. …
Persistent link: https://www.econbiz.de/10010762501
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What is the Role of Legal Systems in Financial Intermediation? Theory and Evidence
Da Rin, Marco; Bottazzi, L.; Hellmann, T. - Tilburg University, Center for Economic Research - 2008
We develop a theory and empirical test of how the legal system affects the relationship between venture capitalists and entrepreneurs. The theory uses a double moral hazard framework to show how optimal contracts and investor actions depend on the quality of the legal system. The empirical...
Persistent link: https://www.econbiz.de/10011090634
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Law, Innovation and Finance: A Review
Armour, John - ESRC Centre for Business Research - 2002
A number of recent national and EU initiatives have sought explicitly to encourage innovative firms and venture capital finance. In keeping with the policy debate, this paper focuses explicitly on the role of law and lawyers in facilitating venture capital: that is, both supply by investors, and...
Persistent link: https://www.econbiz.de/10005687984
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The Exit Decision in the European Venture Capital Market
Felix, Elisabete Gomes Santana; Pires, Cesaltina; … - Centro de Estudos e Formação Avançada em Gestão e … - 2008
This article analyzes the exit decision in the European venture capital market, studying when to exit and how it interacts with the exit form. The paper emphasizes the impact of asymmetric information on the divestment decision. Our model considers the impact of caracteristics of the venture...
Persistent link: https://www.econbiz.de/10005812886
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Creative Destruction and Productive Preemption
Norbäck, Pehr-Johan; Persson, Lars; Svensson, Roger - CESifo - 2013
We develop a theory of innovation for entry and sale into oligopoly, and show that inventions of higher quality are …
Persistent link: https://www.econbiz.de/10010877893
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Skill Variety, Innovation and New Business Formation
Hessels, Jolanda; Brixy, Udo; Naudé, Wim; Gries, Thomas - Institute for the Study of Labor (IZA) - 2014
We extend Lazear's theory of skills variety and entrepreneurship in three directions. First, we provide a theoretical … that being a generalist does not seem to be important in this regard. Finally, we find that innovation positively moderates …, but also commercial value. Our findings support the notion that entrepreneurship can be learned. …
Persistent link: https://www.econbiz.de/10010884235
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Skill Variety, Innovation and New Business Formation
Hessels, Jolanda; Brixy, Udo; Naudé, Wim; Gries, Thomas - Tinbergen Instituut - 2014
We extend Lazear’s theory of skills variety and entrepreneurship in three directions. First, we provide a theoretical … being a generalist does not seem to be important in this regard. Finally, we find that innovation positively moderates the … commercial value. Our findings support the notion that entrepreneurship can be learned. …
Persistent link: https://www.econbiz.de/10011272604