Convertible preferred stock in venture capital financing
We develop a model in which cash-constrained entrepreneurs seek a venture capitalist (VC) to finance a new firm. Costly monitoring is employed by VCs to reduce entrepreneurial moral hazard. When monitoring reveals poor performance, VCs want to punish the entrepreneur with liquidation. However, when...
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| Médium: | Working paper |
| Vydáno: |
University of Oxford
2006
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