This paper studies how the use of alternative valuation methodologies affects investment performance for a sample of 53 German venture capitalists. We measure investment performance by the amount of investments they need to write off and by the number of companies they take public. We find that...

Valuing early-stage high-technology growth-oriented companies is a challenge to current valuation methodologies. This inability to come up with robust point estimates of value should not and does not lead to a breakdown of market liquidity: Instead, efforts are redirected towards the design of...

This paper uses contingent claims analysis to investigate the staging decision of a venture capitalist in a principal-agent framework. Venture capital investment opportunities are modeled as real options with multiple volatilities, and the entrepreneur's incentive is assumed to maximize the...

Typically, ventures are financed in stages. Stage financing provides an exit option to the venture capitalist. This option is valuable when bad states of nature or moral hazard by the entrepreneur are likely to occur. This paper shows that stage financing may induce the entrepreneur to behave...

Numerous studies document long-run underperformance by firms following initial public offerings or seasoned offerings. In this paper I show that such underperformance is very likely to be observed ex-post in an efficient market. The premise is that more firms issue equity at higher stock prices...

This paper studies how externalities between projects affect investment decisions and investor involvement with the companies they invest in. Entrepreneurs select investors for their projects, choosing between venture capitalists and individual quot;angelquot; investors. In industries with high...

This paper provides an empirical study of the resolution of financial distress in England. The study is based upon a unique data set of 532 financially distressed UK companies, most of which are small and privately held. The data were assembled from the private records of three major commercial...

This paper provides an explanation for the urge of banks to merge and expand scope. We build a model where bank activities evolve over time. Due to deregulation and technological advances, new opportunities become available, but the skill needed to exploit them effectively may be unknown. Early...

We examine deal-level data from 395 private equity transactions in Western Europe initiated by large private equity houses during the period 1991 to 2007. We un-lever the deal-level equity return and adjust for un-levered return to quoted peers to extract a measure of abnormal performance of the...

We develop measures of the management quality of firms and make use of a unique sample of hand-collected data to examine the relationship between the reputation and quality of a firm's management and its financial policies, a relationship that has so far received little attention in the...