Entrepreneurial Financing, Advice, and Agency Costs

Roland Strausz ()

Journal of Economics & Management Strategy, 2009, vol. 18, issue 3, pages 845-870

Abstract: "We develop a model to study the interplay between advice and agency costs in entrepreneurial financing. We demonstrate a tension between the entrepreneur's motivation for effort and the investor's willingness to finance the project. Advice to the entrepreneur exacerbates this tension. Consequently, optimal financing contracts may involve full, partial, or no advice. With partial advice, information flows need to be controlled carefully. Such control is better when advice and finance are integrated as observed by venture capitalists." Copyright (c) 2009, The Author(s) Journal Compilation (c) 2009 Wiley Periodicals, Inc..

Date: 2009

Downloads: (external link)
http://www.blackwell-synergy.com/servlet/useragent ... &year=2009&part=null link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Entrepreneurial Financing, Advice, and Agency Costs
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:jemstr:v:18:y:2009:i:3:p:845-870

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=1058-6407&site=1

Access Statistics for this article

More articles in Journal of Economics & Management Strategy from Blackwell Publishing
Series data maintained by Christopher F. Baum ().