Crowdfunding has generally been used to finance very innovative projects. Recently, however, companies have begun using it to finance more traditional products where they compete against other sellers of similar products. One of the major crowdfunding platforms, Indiegogo, has launched several...

This paper analyzes debt-equity choice for financing a two-stage investment when a firm’s insiders have private information about the firm’s expected earnings. When private information is one-dimensional (for example when short-term earnings are common knowledge while long-term earnings are...

This paper surveys 4 major capital structure theories: trade-off, pecking order, signaling and market timing. For each theory, a basic model and its major implications are presented. These implications are compared to the available evidence. This is followed by an overview of pros and cons for...

We analyze equity financing for a two-stage investment and consider different informational structures. When private information is short-term, equilibria are consistent with signalling theory and pecking-order theory. When private information is long-term, equilibria may exist where high...

According to Graham and Harvey (2001), an immense gap exists between capital structure theories and practice. By analyzing students’ perception of capital structure theories and the differences between their opinion and that of the current CEO’s and managers this paper argues that this can...

The literature analyzing games where some players have private information about their "types" is usually based on the duality of "good" and "bad" types (GB approach), where "good" type denotes the type with better quality. In contrast, this paper analyzes a signalling game without types...

This paper considers a financing problem for an innovative firm that is considering launching a web-based platform. Our model is the first one that analyzes an entrepreneur's choice between security tokens (via a security token offering (STO)) and utility tokens (via initial coin offering...

We build a model of debt for firms with investment projects for which flexibility and free cash flow problems are important issues. We focus on the factors that lead the firm to select the zero-debt policy. Our model provides an explanation of the so-called "zero-leverage puzzle" (Strebulaev and...

This paper offers a model of a firm that raises funds for financing an innovative business project and chooses between ICO (initial coin offering) and equity financing. The model is based on information problems associated with both ICO and equity financing well documented in literature. The...

This paper analyzes a financing problem for an innovative firm that is considering launching a web-based platform. Our model is the first one that analyzes an entrepreneur's choice between initial exchange offering (IEO) and initial coin offering (ICO). Compared to ICO, under IEO the firm is...