The market for secondary venture capital transactions provides a way for investors to obtain liquidity if the investee start-up corporation has not yet reached sufficient maturity for an IPO. It also creates divestment opportunities for badly performing ventures that investors would rather...

The relationship between venture capital and growth is examined using an endogenous growth model incorporating dynamic contracts between entrepreneurs and venture capitalists. At each stage of financing, venture capitalists evaluate the viability of startups. If viable, venture capitalists...

External finance is central for nascent entrepreneurs, people in the process of starting new ventures. We argue that nascent entrepreneurs use patents and prototypes in order to signal their ability to appropriate the returns from their innovation as well as the projectś feasibility. Our...

External finance is central for nascent entrepreneurs, people in the process of starting new ventures. We argue that nascent entrepreneurs use patents and prototypes in order to signal their ability to appropriate the returns from their innovation as well as the project’s feasibility. Our...

This paper sheds light on the significant role of networks, particularly alumni networks, in venture capital markets. I leverage the instance of a new partner, carrying new alumni networks, entering a venture capital firm as a plausible exogenous shock to the VC's alumni networks. This...

Employing a large dataset of venture capital investments in US Internet firms, we analyze the effect of the current financial crisis on the venture capital market. Using regression analysis, we find that the financial crisis is associated with a 20% decrease in the average amount of funds raised...

This paper studies how critical entrepreneurial finance outcomes such as the investment return and equity division are shaped by venture characteristics, financier risk preferences and competitive searching. Our analysis uses a double-hazard agency model in which financiers determine the equity...

The Capital Markets Union (CMU) aims to strengthen capital markets and investments in the EU. In the context of innovative SMEs (start-ups and scale-ups), the CMU's goal is to make more "venture capital" available to these businesses. However, greater volumes of available venture capital can...

This paper develops a theory of how angel and venture capital markets interact. Entrepreneurs first receive angel then venture capital funding. The two investor types are 'friends' in that they rely upon each other's investments. However, they are also 'foes', because at the later stage the...