Year: 2004
Author: Brachtendorf, German, Witt, Peter
Credit and Capital Markets – Kredit und Kapital, Vol. 37 (2004), Iss. 1 : pp. 86–116
Abstract
Entrepreneurial Finance and Optimal Cash Inventories
In this paper we develop a lot size model for entrepreneurial financing problems. Starting out with a modified version of the standard lot sizing-model, we treat the cost of equity for externally provided equity as a dynamic variable. The start-up’s cash burn is also included as a dynamic variable. Using numerical examples, we show that the staging of equity investment in start-ups is significantly advantageous. From our model, we derive the optimum number of financing rounds and the absolute amount of money that can be saved by staging the investment.
Journal Article Details
Publisher Name: Global Science Press
Language: Multiple languages
DOI: https://doi.org/10.3790/ccm.37.1.86
Credit and Capital Markets – Kredit und Kapital, Vol. 37 (2004), Iss. 1 : pp. 86–116
Published online: 2004-01
AMS Subject Headings: Duncker & Humblot
Copyright: COPYRIGHT: © Global Science Press
Pages: 31
Author Details
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