Investor competition and project risk in Venture Capital investments

George Geronikolaou and George Papachristou

Economics Letters, 2016, vol. 141, issue C, 67-69

Abstract: In a double-sided moral hazard framework we model the effect of competition between Venture Capitalists on the risk profile of the investees. We show that as competition increases, investors are willing to finance risky projects that would otherwise be infeasible.

Keywords: Venture Capital; Bargaining power; Investor competition; Moral hazard (search for similar items in EconPapers)
JEL-codes: G24 L1 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:141:y:2016:i:c:p:67-69

DOI: 10.1016/j.econlet.2016.02.007

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