The Optimal Portfolio of Start-Up Firms in Venture Capital Finance

Vesa Kanniainen and Christian Keuschnigg

No 381, CESifo Working Paper Series from CESifo

Abstract: A venture capitalist faces a trade-off between the extent of managerial advice allocated to each start-up and the total number of firms advised. Diminishing returns to advice per firm call for a larger portfolio. As advice gets diluted, further expansion of the portfolio eventually becomes unprofitable.

Keywords: Venture capital finance; double-sided moral hazard; company portfolio (search for similar items in EconPapers)
Date: 2000
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Citations: View citations in EconPapers (13)

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Related works:
Journal Article: The optimal portfolio of start-up firms in venture capital finance (2003)
Working Paper: The Optimal Portfolio of Start-up Firms in Venture Capital Finance (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_381

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