several aspects of corporate financing behavior, including the tendency to rely on internal sources of funds, and to prefer … debt to equity if external financing is required. Extensions and applications of the model are discussed …

provision, asymmetric information and hold-up problems. We explore several financing scenarios, including first …-best, monopolistic, syndicated and fully competitive financing. We solve numerically for the entrepreneur's effort, the terms of … financing, the venture capitalist's investment decision and NPV. We find significant value losses due to holdup problems and …