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Start-Up Investment With Scarce Venture Capital Support Author info | Abstract | Publisher info | Download info | Related research | Statistics Christian Keuschnigg ()
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Venture capitalists, representing informed capital, screen, monitor and advise start-up entrepreneurs. The paper reports three new results on venture capital (VC) finance. First, there is an optimal number of companies in the VC portfolio with a trade-off between the number of companies and the value of managerial advice. Second, dilution of advice plays an important role in the adjustment of the VC industry. Third, as a welfare result, a VC tends to provide too little advisory effort but takes too many companies to be advised. Testable implications are discussed.
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Paper provided by Department of Economics, University of St. Gallen in its series University of St. Gallen Department of Economics working paper series 2002 with number
2002-03.
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Length: 43 pages
Date of creation: Jan 2002Date of revision:
Handle: RePEc:usg:dp2002:2002-03Contact details of provider: Postal: Dufourstrasse 50, CH - 9000 St.Gallen Email: Web page: http://www.vwa.unisg.ch/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Joerg Baumberger).
Keywords: Venture capital company portfolio managerial advice economic rents Other versions of this item:
Find related papers by JEL classification: D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Capital and Ownership Structure L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Kanniainen, V. & Keuschnigg, C., 2000.
"The Optimal Portfolio of Start-up Firms in Venture Capital Finance ,"
University of Helsinki, Department of Economics
486, Department of Economics.
Other versions:
Vesa Kanniainen & Christian Keuschnigg, 2000.
"The Optimal Portfolio of Start-Up Firms in Venture Capital Finance ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!] Kanniainen, Vesa & Keuschnigg, Christian, 2003.
"The optimal portfolio of start-up firms in venture capital finance ,"
Journal of Corporate Finance ,
Elsevier, vol. 9(5), pages 521-534, November.
[Downloadable!] (restricted) Schmidt, Klaus M., 1999.
"Convertible Securities and Venture Capital Finance ,"
CEPR Discussion Papers
2317, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions:
Schmidt, Klaus M., 1999.
"Convertible Securities and Venture Capital Finance ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!] Klaus M. Schmidt, 2003.
"Convertible Securities and Venture Capital Finance ,"
Journal of Finance ,
American Finance Association, vol. 58(3), pages 1139-1166, 06.
[Downloadable!] (restricted) Chan, Yuk-Shee & Siegel, Daniel R & Thakor, Anjan V, 1990.
"Learning, Corporate Control and Performance Requirements in Venture Capital Contracts ,"
International Economic Review ,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 31(2), pages 365-81, May.
[Downloadable!] (restricted)
Norton, Edgar & Tenenbaum, Bernard H., 1993.
"Specialization versus diversification as a venture capital investment strategy ,"
Journal of Business Venturing ,
Elsevier, vol. 8(5), pages 431-442, September.
[Downloadable!] (restricted)
Kaplan, Steven & Strömberg, Per Johan, 2000.
"Financial Contracting Theory Meets The Real World: An Empirical Analysis Of Venture Capital Contracts ,"
CEPR Discussion Papers
2421, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Other versions:
Steven N. Kaplan & Per Stromberg, 2000.
"Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts ,"
NBER Working Papers
7660, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Steven N. Kaplan & Per Strömberg, 2000.
"Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts ,"
CRSP working papers
513, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
[Downloadable!] Steven N. Kaplan & Per Stromberg, 2003.
"Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts ,"
Review of Economic Studies ,
Blackwell Publishing, vol. 70(2), pages 281-315, 04.
[Downloadable!] (restricted) Gavin C Reid & Nicholas G Terry & Julia A Smith, 1995.
"Risk Management in Venture Capital Investor-Investee Relations ,"
CRIEFF Discussion Papers
9505, Centre for Research into Industry, Enterprise, Finance and the Firm.
[Downloadable!]
Other versions: Gorman, Michael & Sahlman, William A., 1989.
"What do venture capitalists do? ,"
Journal of Business Venturing ,
Elsevier, vol. 4(4), pages 231-248, July.
[Downloadable!] (restricted)
Sahlman, William A., 1990.
"The structure and governance of venture-capital organizations ,"
Journal of Financial Economics ,
Elsevier, vol. 27(2), pages 473-521, October.
[Downloadable!] (restricted)
Keuschnigg, Christian & Nielsen, Soren Bo, 2003.
"Tax policy, venture capital, and entrepreneurship ,"
Journal of Public Economics ,
Elsevier, vol. 87(1), pages 175-203, January.
[Downloadable!] (restricted)
Other versions:
Christian Keuschnigg & Søren Bo Nielsen, .
"Tax Policy, Venture Capital, and Entrepreneurship ,"
EPRU Working Paper Series
00-18, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
[Downloadable!] Keuschnigg, Christian & Nielsen, Soren Bo, 2000.
"Tax Policy, Venture Capital and Entrepreneurship ,"
CEPR Discussion Papers
2626, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Christian Keuschnigg & Soren Bo Nielsen, 2000.
"Tax Policy, Venture Capital, and Entrepreneurship ,"
Econometric Society World Congress 2000 Contributed Papers
1848, Econometric Society.
[Downloadable!] Christian Keuschnigg & Soren Bo Nielsen, 2000.
"Tax Policy, Venture Capital, and Entrepreneurship ,"
NBER Working Papers
7976, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted) Thomas Hellmann, 1998.
"The Allocation of Control Rights in Venture Capital Contracts ,"
RAND Journal of Economics ,
The RAND Corporation, vol. 29(1), pages 57-76, Spring.
[Downloadable!] (restricted)
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Cumming, D. & Johan, S., 2005.
"Provincial preferences in private equity ,"
Discussion Paper
04, Tilburg University, Tilburg Law and Economic Center.
[Downloadable!]
Other versions: Christian Keuschnigg & Soren Bo Nielsen, 2002.
"Start-ups, Venture Capitalits, and the Capital Gains Tax ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!]
Other versions:
Keuschnigg, Christian & Nielsen, Soren Bo, 2002.
"Start-ups, Venture Capitalists and the Capital Gains Tax ,"
CEPR Discussion Papers
3263, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Christian Keuschnigg & Soren Bo Nielsen, 2002.
"Start-ups, Venture Capitalists, and the Capital Gains Tax ,"
University of St. Gallen Department of Economics working paper series 2002
2002-05, Department of Economics, University of St. Gallen.
[Downloadable!] Keuschnigg, Christian & Nielsen, Soren Bo, 2004.
"Start-ups, venture capitalists, and the capital gains tax ,"
Journal of Public Economics ,
Elsevier, vol. 88(5), pages 1011-1042, April.
[Downloadable!] (restricted) Douglas Cumming & Daniel Schmidt & Uwe Walz, 2004.
"Legality and Venture Governance Around the World ,"
CFS Working Paper Series
2004/17, Center for Financial Studies.
[Downloadable!]
Paolo M. Panteghini, 2002.
"On Debt Financing and Investment Timing ,"
Finnish Economic Papers ,
Finnish Society for Economic Research, vol. 15(2), pages 110-114, Autumn.
[Downloadable!]
Jyrki Ali-Yrkkö & Ari Hyytinen & Johanna Liukkonen, 2001.
"Exiting Venture Capital Investments: Lessons from Finland ,"
Discussion Papers
781, The Research Institute of the Finnish Economy.
[Downloadable!]
Oliver Fabel & Dominique Demougin, 2004.
"The Division of Ownership in New Ventures ,"
Working Papers of the Research Group Heterogenous Labor
04-03, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim.
[Downloadable!]
Other versions: John Armour & Douglas Cumming, 2004.
"The Legal Road To Replicating Silicon Valley ,"
ESRC Centre for Business Research - Working Papers
wp281, ESRC Centre for Business Research.
[Downloadable!]
Douglas J. Cumming & Jeffrey G. MacIntosh, 2003.
"Comparative Venture Capital Governance. Private versus Labour Sponsored Venture Capital Funds ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!]
Cumming, Douglas & Johan, Sofia, 2006.
"Corporate social responsibility: domestic and international private equity institutional investment ,"
Discussion Paper
2, Tilburg University, Tilburg Law and Economic Center.
[Downloadable!]
Other versions: Christian Keuschnigg & Soren Bo Nielsen, 2003.
"Taxes and Venture Capital Support ,"
CESifo Working Paper Series
CESifo Working Paper No. , CESifo GmbH.
[Downloadable!]
Other versions: José Martí Pellón & Marina Balboa, 2003.
"Characterisation Of The Reputation Of Private Equity Managers: Evidence In Spain ,"
Working Papers. Serie EC
2003-16, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
[Downloadable!]
Andrea Schertler, 2002.
"Path Dependencies in Venture Capital Markets ,"
Kiel Working Papers
1120, Kiel Institute for the World Economy.
[Downloadable!]
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