Using an agency framework, this paper examines advantages of offering venture capitalists a choice between public equity and loan schemes. Both schemes can be used to promote venture capital investments in hightechnology enterprises since they encourage inexperienced venture capitalists to...

Purpose - The purpose of this paper is to model asymmetric information and study the profitability of venture capital (VC) backed initial public offerings (IPOs). Our mixtures approach endogenously separates IPOs into differentiated groups based on their returns' determinants. We also analyze...

In this paper we set up a model of start-up finance under double moral hazard. Entrepreneurs lack own resources and business experience to develop their ideas. Venture capitalists can provide start-up finance and commercial support. The effort put forth by either agent contributes to the firm s...

The paper proposes a simple equilibrium model of venture capital, entrepreneurship and innovation. Venture capitalists not only finance but also advise start-up entrepreneurs and thereby add value to new firms. The paper demonstrates how a productive and active VC industry boosts innovation...

A model of start-up finance with double moral hazard is proposed. Entrepreneurs have ideas but lack own resources as well as commercial experience. Venture capitalists provide start-up finance and managerial support. Both types of agents thus jointly contribute to the firm s success, but neither...