Startups face a trade-off between short-term profitability versus long-term growth where investors tolerate prolonged financial losses. We present a new theory and empirical evidence about the existence and shape of so-called J-curves. The theory predicts that investors facing better exit...

There is considerable controversy about the allocation of equity in university spinouts. Founder teams and outside investors frequently criticize universities for taking excessive ownership stakes, weakening entrepreneurial incentives, and making spinouts ‘uninvestable.’ Universities in turn...

We investigate the impact of the UK regulatory sandbox on the UK FinTech industry. By now regulatory sandboxes operate in 57 countries and have become an important policy tool for governments to support the emergence of a FinTech sector. We use comprehensive data from the UK regulatory sandbox...

This paper analyzes the decision of growing startups to either scale up on their own or to sell to an established company. The model recognizes the intergenerational linkages that acquirers were startups themselves in the past who chose not to get acquired. The acquisition price depends on the...

It is well known that start-ups with female founders often raise less money than their male counterparts; the question is, what drives this? We exploit the unique features of equity crowdfunding to disentangle the choices made by entrepreneurs and investors. We find that female teams set lower...

Thinking beyond Covid-19, there is a growing interest in what economic structures will be needed to face ongoing pandemics. In this paper we focus on the diagnostic problem and examine a new paradigm of voluntary self-testing by private individuals. People without symptoms face daily choices of...

This paper re-examines the role of investor power in a model of staged equity financing. It shows how the usual effect where market power reduces valuations can be reversed in later rounds. Once they become insiders, powerful investors may use their market power to increase, not decrease...