Taxation and Venture Capital-Backed Entrepreneurship

Søren Nielsen and Christian Keuschnigg

No 4097, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In recent years, venture capital has increasingly become a factor in the financing of new firms. We examine how the value of mature firms determines the incentives of entrepreneurs to start up new firms and of venture capitalists to finance and advise them. We examine how capital gains taxes as well as subsidies to start-up costs of new firms affect venture capital-backed entrepreneurship. We also argue that dividend and capital gains taxes on mature firms have important consequences for start-up firms as well.

Keywords: Taxes; Venture capital; entrepreneurship; Double moral hazard (search for similar items in EconPapers)
JEL-codes: D82 G24 H24 H25 (search for similar items in EconPapers)
Date: 2003-10
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-pbe and nep-pub
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Citations: View citations in EconPapers (3)

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Journal Article: Taxation and Venture Capital Backed Entrepreneurship (2004)
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