We study the effect of ambiguity — Knightian uncertainty — on payout policy. We find that firm-level ambiguity increases and accelerates payout, via both dividends and share repurchases. This positive effect of ambiguity is distinct from the known negative effect of risk on payout policy....

Venture capital (VC) has emerged as one of the dominant forms of financing for technology intensive industries. Many start-ups have flourished tremendously after receiving VC funding and have gone on to become industry leaders. Prominent examples include Apple, Cisco, Intel, Genentech, and most...