A Theory on Pre-ICO Venture Capital Involvement

Autor:	Karsten Bocks, Christian Haas, Thomas Heyden
Rok vydání:	2019
Předmět:	Finance Revenue sharing Moral hazard business.industry media_common.quotation_subject Equity (finance) Business Venture capital Welfare media_common
Zdroj:	SSRN Electronic Journal.
ISSN:	1556-5068
DOI:	10.2139/ssrn.3402623
Popis:	We study the trade-off venture capitalists encounter in a financing framework under moral hazard. The venture capitalist has the option to supply funds either within a revenue-sharing contract or via equity but faces a hidden effort problem. While projects with a low degree of moral hazard yield higher returns to the venture capitalist when financed by equity, revenue-sharing contracts become superior as moral hazard increases. At high moral hazard levels, revenue sharing becomes the sole financing option and hence can raise welfare. We apply our model in the context of initial coin offerings as a modern form of revenue sharing.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::7b7735b2cc8755922df64bb25e2848af https://doi.org/10.2139/ssrn.3402623 Zobrazit plný text záznamu