A model is presented representing the expectations of a venture capitalist and an entrepreneur who are working on the development of a new enterprise. The model assumes that the venture capitalist requires more control because of his or her financial investment. The entrepreneur is compensated...

The existing literature in both public economics and financial economics often fails to consider how appropriate and effective public policy may be in promoting the venture capital industry. Public economics has dealt extensively with the effect of taxes and subsidies but has neglected the...