The successful foundation of entrepreneurial firms comprises a multitude of complementary human tasks. Within entrepreneurial teams, the effect of founders' human capital on firm success hinges on the information structure that prevails when nascent entrepreneurs are matched in partnerships....

We derive the optimal contract between a principal and a liquidity-constrained agent in a stochastically repeated environment. The contract comprises a court-enforceable explicit bonus rule and an implicit fixed salary promise that must be self-enforcing. Since the agent's rent increases with...