Resource title

Comparative Advantages of Public Loan and Public Equity Schemes in Venture Capital Markets

Resource image

image for OpenScout resource :: Comparative Advantages of Public Loan and Public Equity Schemes in Venture Capital Markets

Resource description

Using an agency framework, this paper examines advantages of offering venture capitalists a choice between public equity and loan schemes. Both schemes can be used to promote venture capital investments in hightechnology enterprises since they encourage inexperienced venture capitalists to accumulate experience. However, under both schemes, experienced venture capitalists save on management support. This paper shows that offering venture capitalists a choice between these two schemes can lead to a positive self-selection. Inexperienced venture capitalists choose public equity under which they have higher incentives to enter the market. Experienced venture capitalists choose public loans under which they have lower incentives to save on their management support.

Resource author

Andrea Schertler

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/17782

Resource license

Adapt according to the presented license agreement and reference the original author.