Public Taxation and Venture Capital Backed Entrepreneurship
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.Download Info
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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 2003 with number 2003-17.Length: 34 pages
Date of creation: Sep 2003
Date of revision:
Handle: RePEc:usg:dp2003:2003-17
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Related research
Keywords: Taxes; venture capital; entrepreneurship; double moral hazard;Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-CFN-2003-09-28 (Corporate Finance)
- NEP-ENT-2003-09-28 (Entrepreneurship)
- NEP-PBE-2003-09-28 (Public Economics)
- NEP-POL-2003-09-28 (Positive Political Economics)
- NEP-TID-2003-09-28 (Technology & Industrial Dynamics)
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