Financing Ventures

Jeremy Greenwood, Juan Sanchez and Pengfei Han ()

No 1204, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: 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 fi nancing, venture capitalists evaluate the viability of startups. If viable, VCs provide funding for the next stage. The success of a project depends on the amount of funding. The model is confronted with stylized facts about venture capital; viz., statistics by funding round concerning the success rate, failure rate, investment rate, equity shares, and the value of an IPO. Raising capital gains taxation reduces growth and welfare.

Date: 2018
New Economics Papers: this item is included in nep-cfn, nep-cta, nep-dge, nep-ent, nep-fdg, nep-gro and nep-sbm
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Related works:
Journal Article: FINANCING VENTURES (2022)
Working Paper: Financing Ventures (2021)
Working Paper: Financing Ventures (2018)
Working Paper: Financing Ventures (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:1204

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