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| Tekijä: | Schmidt, K. M. |
| Otsikko: | Convertible securities and venture capital finance |
| Lehti: | Journal of Finance
2003 : JUN, VOL. 58:3, p. 1139-1166 |
| Asiasana: | Venture capital Securities Investments Cash flow |
| Kieli: | eng |
| Tiivistelmä: | The paper offers a new explanation for the prevalent use of convertible securities in venture capital finance. Convertible securities can be used to endogenously allocate cash-flow rights as a function of the state of the world and the entrepreneur's effort. This property can be used to induce the entrepreneur and the venture capitalist to invest efficiently into the project. The result is robust to renegotiation and to changes in the timing of investments and information flows. |
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