000			00987nab a22001817a 4500
008			160615b2014 xxu||||| |||| 00| 0 eng d
100			_aArcot, Sridhar
245			_aParticipating convertible preferred stock in venture capital _cArcot, Sridhar.
260			_c2014
300			_a72-87
520			_aThis paper develops a theory of the participating convertible preferred (PCP) stock commonly used in venture capital settings. I show that the participation and convertibility features of PCP stock can be used to reduce information asymmetry between the venture and potential investors at the time of exit. Further, the convertibility feature of PCP helps in alleviating the problem of insufficient entrepreneurial effort. I then derive implications for the two most common types of exits in venture capital
650			_aTs
650			_aIpos
650			_aSignaling
650			_aExits
650			_aParticipating Convertibles
773			_aJournal of Business Venturing _dJanuary
999			_c42091 _d42091