Moral hazard in VC finance : more expensive than you thought

Tennert, Julius; Lambert, Marie; Burghof, Hans-Peter

Moral hazard in VC finance : more expensive than you thought

dc.contributor.author	Tennert, Julius	de
dc.contributor.author	Lambert, Marie	de
dc.contributor.author	Burghof, Hans-Peter	de
dc.date.accessioned	2024-04-08T08:53:59Z
dc.date.available	2024-04-08T08:53:59Z
dc.date.created	2017-02-28
dc.date.issued	2017
dc.description.abstract	Venture projects are fraught with exogenous market risk and endogenous agency risk. We apply a real options perspective to analyze the investment decision of the venture capitalist (VC) in this set-up. The solutions presented are conflictive: the VC reduces his exposure to exogenous risk by delaying investments to wait for informational updates (delay option), but he mitigates endogenous risk by advancing investments to discover entrepreneur’s effort. So far, papers focus on the optimal timing of investments considering independence of exogenous and endogenous risk. We show that interdependence of exogenous risk and endogenous risk exists. We find that endogenous risk prompts the VC to accelerate the discovery process when exogenous risk is high, and to abandon the delay option when it is most valuable.	en
dc.identifier.swb	484563122
dc.identifier.uri	https://hohpublica.uni-hohenheim.de/handle/123456789/6122
dc.identifier.urn	urn:nbn:de:bsz:100-opus-13315
dc.language.iso	eng
dc.relation.ispartofseries	Hohenheim discussion papers in business, economics and social sciences; 2017,02
dc.rights.license	publ-mit-pod	en
dc.rights.license	publ-mit-pod	de
dc.rights.uri	http://opus.uni-hohenheim.de/doku/lic_mit_pod.php
dc.subject	Venture capital	en
dc.subject	Real option	en
dc.subject	Agency cost	en
dc.subject	Moral hazard	en
dc.subject.ddc	330
dc.subject.gnd	Realoption	de
dc.subject.gnd	Risikokapital	de
dc.title	Moral hazard in VC finance : more expensive than you thought	de
dc.type.dcmi	Text	de
dc.type.dini	WorkingPaper	de
local.access	uneingeschränkter Zugriff	en
local.access	uneingeschränkter Zugriff	de
local.bibliographicCitation.publisherPlace	Universität Hohenheim	de
local.faculty.number	3	de
local.institute.number	520	de
local.opus.number	1331
local.series.issueNumber	2017,02
local.series.title	Hohenheim discussion papers in business, economics and social sciences
local.university	Universität Hohenheim	de
local.university.faculty	Faculty of Business, Economics and Social Sciences	en
local.university.faculty	Fakultät Wirtschafts- und Sozialwissenschaften	de
local.university.institute	Institute for Economics	en
local.university.institute	Institut für Volkswirtschaftslehre	de

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