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The Optimal Multistage Effort and Contract of VC’s Joint Investment
Author
Source
Discrete Dynamics in Nature and Society
Issue
Vol. 2015, Issue 2015 (31 Dec. 2015), pp.1-14, 14 p.
Publisher
Hindawi Publishing Corporation
Publication Date
2015-08-31
Country of Publication
Egypt
No. of Pages
14
Main Subjects
Abstract EN
If the venture project has a great demand of investment, venture entrepreneurs will seek multiple venture capitalists to ensure necessary funding.
This paper discusses the decision-making process in the case that multiple venture capitalists invest in a single project.
From the beginning of the project till the withdrawal of the investment, the efforts of both parties are long term and dynamic.
We consider the Stackelberg game model for venture capital investment in multiple periods.
Given the optimal efforts by the entrepreneurs, our results clearly show that as time goes, in every single period entrepreneurs will expect their share of revenue paid to shrink.
In other words, they expect a higher ex ante payment and a lower ex post payment.
But, in contrast, venture capitalists are expecting exactly the opposite.
With a further analysis, we also design an optimal contract in multiple periods.
Last but not the least, several issues to be further investigated are proposed as well.
American Psychological Association (APA)
Wu, Meng. 2015. The Optimal Multistage Effort and Contract of VC’s Joint Investment. Discrete Dynamics in Nature and Society،Vol. 2015, no. 2015, pp.1-14.
https://search.emarefa.net/detail/BIM-1060832
Modern Language Association (MLA)
Wu, Meng. The Optimal Multistage Effort and Contract of VC’s Joint Investment. Discrete Dynamics in Nature and Society No. 2015 (2015), pp.1-14.
https://search.emarefa.net/detail/BIM-1060832
American Medical Association (AMA)
Wu, Meng. The Optimal Multistage Effort and Contract of VC’s Joint Investment. Discrete Dynamics in Nature and Society. 2015. Vol. 2015, no. 2015, pp.1-14.
https://search.emarefa.net/detail/BIM-1060832
Data Type
Journal Articles
Language
English
Notes
Includes bibliographical references
Record ID
BIM-1060832