U.S. venture capital financings of U.S. entrepreneurial firms with up to 213 observations is consistent with the proposition that convertible preferred equity is the optimal form of venture capital finance. This paper introduces new evidence from 208 U.S. venture capital financings of Canadian...

This paper introduces a dataset on forms of finance used in 12,363 Canadian and US venture capital and private equity financings of Canadian entrepreneurial firms from 1991 to 2003. The data comprise different types of venture capital institutions, including corporate, limited partnership,...

We develop a general dynamic model in which borrowing constraints arise endogenously as part of a constrained- efficient contract when borrowers face limited liability and debt repayment cannot be perfectly enforced. The model is qualitatively consistent with the some stylized facts on the...

The study applies an integrated empirical framework, in order to investigate the impact of financial decisions (debt and dividend policies) on corporate performance and firm market value. Particular attention is paid to the joint implications associated with different ownership and corporate...

This paper identifies a strong tendency for Canadian private equity investors to finance entrepreneurs that reside in the same province. For all types of investors and entrepreneurial firms, in terms of the numbers of investments (13,729 transactions), 84.42% of investments were...

This paper introduces a new dataset from 50 private investment funds from 17 countries around the world. We analyse the frequency of use of investment covenants imposed by institutional investors governing the activities of private investment fund managers in areas pertaining to investment...

Prior research has argued that convertible preferred equity is the optimal form of venture capital finance, based on datasets with up to 213 observations from the U.S., where unique tax biases exist in favour of convertible preferred. This paper introduces a comparable sample of 3083 Canadian...

I examine the effect of investment frictions on leverage dynamics, using a model of the firm whose investments are 1) indivisible and lumpy, and 2) subject to time-to-build, which is a time lag between when investment expenditures are made and when the investment begins to generate cash. The...

While strong shareholder control benefits the firm by preventing Free-Cash-Flow problems in the good state of business cycles, it is costly to the firm in exacerbating the Conflict-of-Interest problem between shareholders and creditors in the bad state. Investigating how firm financial policies...

Consistent with a lifecycle theory of dividends, the fraction of publicly traded industrial firms that pays dividends is high when retained earnings are a large portion of total equity (and of total assets) and falls to near zero when most equity is contributed rather than earned. We observe a...