Investments in new ventures involve financial contracts between an entrepreneur and outside investors. Investors, such as venture capital firms, represent well-diversified investors. In contrast, the entrepreneur must commit a substantial fraction of human and financial capital to the venture....

Using a large sample of fund-years, we investigate the performance reporting behaviors of general partners (GPs) and limited partners (LPs) of Venture Capital (VC) funds. Self-reporting by GPs raises the concern that the information investors rely on may be biased, either due to selective...