Venture Capital

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Section Title	Page	Action	Price
Preface	6
Contents	8
List of Figures	10
List of Tables	12
List of Abbreviations	14
1 Introduction	16
2 Moral Hazard in VC Finance	22
2.1 Introduction	22
2.2 Formal Model	25
2.2.1 The Entrepreneurial Project	25
2.2.2 Maximization Function of the VC	27
2.2.3 Participation Constraint of the Entrepreneur	27
2.2.4 Solution without Relevance of Human Capital	29
2.2.5 Solution with Relevance of Human Capital	30
2.2.6 Opportunity Loss of the VC	30
2.3 Empirical Approach	35
2.3.1 Sample	35
2.3.2 Econometric Method	35
2.3.3 Measures	37
2.3.4 Empirical Results	40
2.3.5 Robustness Checks	44
2.4 Conclusion	50
3 Learning in Funding Relationships	54
3.1 Introduction	54
3.2 Learning and Comprehensiveness	57
3.3 Frictions in the Learning Process	59
3.4 Formal Hypotheses	61
3.5 Data and Methodology	64
3.5.1 Sample	64
3.5.2 Measures	65
3.5.3 Econometric Specification	75
3.6 Results	78
3.6.1 Summary Statistics and Selection Regressions	78
3.7 Conclusion	87
4 VCs as Intermediaries in Exits	92
4.1 Introduction	92
4.2 Agency Cost in IPO and Trade Sale Exits	95
4.2.1 Adverse Selection Pre-Exit	95
4.2.2 Moral Hazard Post-Exit	96
4.3 Investor Characteristics	98
4.4 Firm Characteristics	101
4.5 Sample and Methodology	102
4.5.1 Sample	102
4.5.2 Methodology	103
4.5.3 Control Variables	104
4.6 Results	106
4.6.1 Descriptive Statistics	106
4.6.2 Multivariate Analysis	112
4.6.3 Classification Tree Analysis	117
4.7 Conclusion	129
5 Conclusion	132
5.1 Summary of the Main Results	132
5.2 Outlook	133
Bibliography	136