Financing Ventures

Jeremy Greenwood, Pengfei Han (pengfeihan@gsm.pku.edu.cn) and Juan Sanchez

No 29, Economie d'Avant Garde Research Reports from Economie d'Avant Garde

Abstract: The relationship between venture capital and growth is examined using an endogenous growth model incorporating dynamic contracts between entrepreneurs and venture capitalists. At each stage of financing, venture capitalists evaluate the viability of startups. If viable, VCs provide funding for the next stage. The success of a project depends on the amount of funding. The model is confronted with stylized facts about venture capital; viz., statistics by funding round concerning the success rate, failure rate, investment rate, equity shares, and the value of an IPO. Raising capital gains taxation reduces growth and welfare. In International Economic Review (2022), v. 63, n. 3: 1021-1053

Keywords: capital gains taxation; dynamic contract; endogenous growth; evaluating; funding rounds; growth regressions; IPO; monitoring; startups; research and development; venture capital (search for similar items in EconPapers)
Date: 2018-02
New Economics Papers: this item is included in nep-cfn, nep-cta, nep-dge, nep-ent, nep-fdg, nep-gro and nep-sbm
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: FINANCING VENTURES (2022)
Working Paper: Financing Ventures (2021)
Working Paper: Financing Ventures (2018)
Working Paper: Financing Ventures (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eag:rereps:29

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