000 | 00987nab a22001817a 4500 | ||
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008 | 160615b2014 xxu||||| |||| 00| 0 eng d | ||
100 | _aArcot, Sridhar | ||
245 |
_aParticipating convertible preferred stock in venture capital _cArcot, Sridhar. |
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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 |
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999 |
_c42091 _d42091 |