Venture capitalists not only finance but also advise and thereby add value to young innovative firms. The prospects of venture capital backed firms thus depend on joint efforts of entrepreneurs and informed venture capitalists, and are subject to double moral hazard. In financing a portfolio of...

An investment that is characterized by exit flexibility requires both decisions on investment and holding period. As selling an investment often leads to tax-liable capital gains and capital gains crucially depend on the duration of an investment we investigate the impact of capital gains...