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Taxation and Venture Capital-Backed Entrepreneurship

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  • Keuschnigg, Christian
  • Nielsen, Soren Bo

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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 4097.

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Date of creation: Oct 2003
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Handle: RePEc:cpr:ceprdp:4097

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Keywords: double moral hazard; entrepreneurship; taxes; venture capital;

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Citations

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Cited by:
  1. Christian Keuschnigg & Søren Bo Nielsen, 2004. "Taxation and Venture Capital Backed Entrepreneurship," International Tax and Public Finance, Springer, vol. 11(4), pages 369-390, 08.
  2. Cumming, D. & Johan, S.A., 2006. "Regulatory harmonization and the development of private equity markets," Discussion Paper 2006-001, Tilburg University, Tilburg Law and Economic Center.
  3. Henrekson, Magnus & Stenkula, Mikael, 2009. "Entrepreneurship and Public Policy," Working Paper Series 804, Research Institute of Industrial Economics.
  4. Christian Keuschnigg & Søren Bo Nielsen, 2007. "Self-Selection and Advice in Venture Capital Finance," CESifo Working Paper Series 1909, CESifo Group Munich.
  5. Yuen-Ping Ho & Poh-Kam Wong, 2007. "Financing, Regulatory Costs and Entrepreneurial Propensity," Small Business Economics, Springer, vol. 28(2), pages 187-204, March.
  6. Vesa Kanniainen & Seppo Kari & Jouko Ylä-Liedenpohja, 2005. "The Start-Up and Growth Stages in Enterprise Formation: The “New View” of Dividend Taxation Reconsidered," CESifo Working Paper Series 1476, CESifo Group Munich.

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