If control of their firms allows entrepreneurs to derive private benefits, it also allows other controlling parties. Private benefits are especially relevant for venture capitalists, who typically get considerable control in their portfolio firms, but not for banks, which are passive loan...

How does the social capital of venture capitalists (VCs) affect the funding of start-ups? Extant entrepreneurship literature conceptualizes a substitute effect between the social and financial capital that new firms attain from their investors. On the contrary, by building on the rich social...

Investments in new venture involve financial contracts between an entrepreneur and one or more outside investors. Outside investors (such as venture capital firms) generally represent well-diversified investors. Even private investors generally commit small fractions of total wealth to any given...

We analyze an entrepreneur's choice between angel and venture capital (VC) financing in a competitive investment market, where the entrepreneur seeks to maintain his ownership share as well as equity value. The key to our analysis is the idea that a negative signal is inferred by the market if...

The article 'Entrepreneurial Incentives and the Role of Initial Coin Offerings' by Garratt and van Oordt revisits a classical principal-agent problem in corporate finance: How do financing choices of firms and the according firm ownership structure impact effort choices of the management and...