کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
5093725 | 1376141 | 2012 | 25 صفحه PDF | دانلود رایگان |
This paper analyzes how the affiliation of a venture capital firm affects the deal terms for innovative entrepreneurial ventures. We develop a theory to explain the advantages of independent and bank-affiliated venture capital funds for entrepreneurs. We assume that independent venture capital firms provide better support quality while bank-affiliated firms are less financially constrained. The entrepreneur selects the optimal contract by trading-off these characteristics. The model allows several empirically testable predictions concerning the nature of projects financed by either type of venture capital firm. Entrepreneurs should seek capital from independent or affiliated venture capitalists contingent on the degree of sophistication of their project, their liquidation value, the importance of expected management support, and the remaining time to fundraising.
⺠Entrepreneurs trade-off support quality and financial constraints of VC firms. ⺠Independent or affiliated VCs can be beneficial for certain types of ventures. ⺠We contribute to the discussion about the “optimal VC firm”.
Journal: Journal of Corporate Finance - Volume 18, Issue 5, December 2012, Pages 1143-1167