Entrepreneurial manipulation with staged financing
Journal of Banking & Finance, 2019, vol. 100, issue C, 273-282
Finance is staged in entrepreneurial settings. It has been argued that staging has a drawback: entrepreneurs manipulate short-term appearances to keep funds flowing. In contrast, this paper finds that staging can lead to either more or less manipulation than non-staged finance. Finally, behavior in early rounds induces a kind of “manipulation persistence” so that total manipulation is path-dependent. The model makes predictions regarding crowdsourced finance, switching of VCs, and lifecycle issues in entrepreneurial finance.
Keywords: Venture capital; Staging; Fraud; Manipulation; Entrepreneurial finance (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:100:y:2019:i:c:p:273-282
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