We analyze a private firm’s choice of exit mechanism between initial public offerings (IPOs) and acquisitions, and we provide a resolution to the “IPO valuation premium puzzle.” The private firm is run by an entrepreneur and a venture capitalist (VC) (insiders) who desire to exit partially...

Using a hand-collected data set of private firm acquisitions and IPOs, this paper develops the first empirical analysis in the literature of the “IPO valuation premium puzzle,” which refers to a situation where many private firms choose to be acquired rather than to go public at higher...

We develop a theory of new-project financing and equity carve-outs under heterogeneous beliefs. In our model, an employee of a firm generates an idea for a new project that can be financed either by issuing equity against the cash flows of the entire firm ("integration"), or by undertaking an...

We develop a new rationale for the formation of VC syndicates, and theoretically analyze the dynamics of VC syndicates. In our model, an entrepreneur needs financing from VC investors to implement his firm's positive NPV project. In addition to financing, VCs can provide the firm with two inputs...

We develop a theory of the management of innovation and equity carve-outs under heterogeneous beliefs among investors in the equity market. We consider a setting where an employee of a firm generates an idea for a new project (ldquo;innovationrdquo;) which can be financed either by issuing...

We develop a theory of new project financing and equity carve-outs under heterogeneous beliefs among investors in the equity market. We consider a setting where an employee of a firm generates an idea for a new project that can be financed either by issuing equity against the future cash flows...

We analyze a private firm's choice of exit mechanism between IPOs and acquisitions, and provide a resolution to the quot;IPO valuation premium puzzle.quot; The private firm is run by an entrepreneur and a venture capitalist (insiders) who desire to exit partially from the firm. A crucial factor...

In this paper, we develop a dynamic model of a limit order market populated with liquidity traders who have only private values. We characterize and analyze the equilibrium order placement strategies of traders and the conditional execution probabilities of limit orders as a function of...