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Start-up Investment With Scarce Venture Capital Support

  • Kanniainen, V.
  • Keuschnigg, C.

Start-up entrepreneurs are often commercially inexperienced. In giving managerial advice, venture capitalists can importantly enhance the success of innovative but highly risky ventures. The supply of experienced venture capitalists is not eas-ily increased, however, when the rate of business formation accelerates. As the entrepreneurial sector expands, the incumbent venture capitalists tend to include more firms in their portfolio which dilutes the quality of advice, making project risks excessively high in the short-run.

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Paper provided by Department of Economics in its series University of Helsinki, Department of Economics with number 503.

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Length: 32 pages
Date of creation: 2001
Date of revision:
Handle: RePEc:fth:helsec:503
Contact details of provider: Postal:
University of Helsinki; Department of Economics, P.O.Box 54 (Unioninkatu 37) FIN-00014 Helsingin Yliopisto

Phone: +358 9 191 8897
Fax: +358 9 191 8877
Web page: http://www.helsinki.fi/politiikkajatalous/
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  19. 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.
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