skip to content
The incentives to start new companies : evidence from venture capital Preview this item
ClosePreview this item
Checking...

The incentives to start new companies : evidence from venture capital

Author: Robert E Hall; Susan E Woodward; National Bureau of Economic Research.
Publisher: Cambridge, MA : National Bureau of Economic Research, ©2007.
Series: Working paper series (National Bureau of Economic Research : Online), working paper no. 13056.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Database:WorldCat
Summary:
"The standard venture-capital contract rewards entrepreneurs only for creating successful companies that go public or are acquired on favorable terms. As a result, entrepreneurs receive no help from venture capital in avoiding the huge idiosyncratic risk of the typical venture-backed startup. Entrepreneurs earned an average of $9 million from each company that succeeded in attracting venture funding. But  Read more...
Rating:

(not yet rated) 0 with reviews - Be the first.

Subjects
More like this

 

Find a copy in the library

&AllPage.SpinnerRetrieving; Finding libraries that hold this item...

Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Robert E Hall; Susan E Woodward; National Bureau of Economic Research.
OCLC Number: 123414691
Notes: Title from PDF file as viewed on 7/16/2007.
Description: 1 online resource.
Series Title: Working paper series (National Bureau of Economic Research : Online), working paper no. 13056.
Responsibility: Robert E. Hall, Susan E. Woodward.

Abstract:

"The standard venture-capital contract rewards entrepreneurs only for creating successful companies that go public or are acquired on favorable terms. As a result, entrepreneurs receive no help from venture capital in avoiding the huge idiosyncratic risk of the typical venture-backed startup. Entrepreneurs earned an average of $9 million from each company that succeeded in attracting venture funding. But entrepreneurs are generally specialized in their own companies and bear the burden of the idiosyncratic risk. Entrepreneurs with a coefficient of relative risk aversion of two would be willing to sell their interests for less than $1 million at the outset rather than face that risk. The standard financial contract provides entrepreneurs capital supplied by passive investors and rewards entrepreneurs for successful outcomes. We track the division of value for a sample of the great majority of U.S. venture-funded companies over the period form 1987 through 2005. Venture capitalists received an average of $5 million in fee revenue from each company they backed. The outside investors in venture capital received a financial return substantially above that of publicly traded companies, but that the excess is mostly a reward for bearing risk. The pure excess return measured by the alpha of the Capital Asset Pricing Model is positive but may reflect only random variation"--National Bureau of Economic Research web site.

Reviews

User-contributed reviews
Retrieving GoodReads reviews...
Retrieving DOGObooks reviews...

Tags

Be the first.
Confirm this request

You may have already requested this item. Please select Ok if you would like to proceed with this request anyway.

Linked Data


Primary Entity

<http://www.worldcat.org/oclc/123414691> # The incentives to start new companies : evidence from venture capital
    a schema:CreativeWork, schema:MediaObject, schema:Book ;
    library:oclcnum "123414691" ;
    library:placeOfPublication <http://experiment.worldcat.org/entity/work/data/197799097#Place/cambridge_ma> ; # Cambridge, MA
    library:placeOfPublication <http://id.loc.gov/vocabulary/countries/mau> ;
    schema:about <http://id.worldcat.org/fast/1204155> ; # United States.
    schema:about <http://id.worldcat.org/fast/1165298> ; # Venture capital
    schema:about <http://id.loc.gov/authorities/subjects/sh2008113185> ; # Venture capital--United States
    schema:about <http://dewey.info/class/330/> ;
    schema:bookFormat schema:EBook ;
    schema:contributor <http://viaf.org/viaf/72466783> ; # Susan E. Woodward
    schema:contributor <http://experiment.worldcat.org/entity/work/data/197799097#Organization/national_bureau_of_economic_research> ; # National Bureau of Economic Research.
    schema:copyrightYear "2007" ;
    schema:creator <http://experiment.worldcat.org/entity/work/data/197799097#Person/hall_robert_e_robert_ernest_1943> ; # Robert Ernest Hall
    schema:datePublished "2007" ;
    schema:description ""The standard venture-capital contract rewards entrepreneurs only for creating successful companies that go public or are acquired on favorable terms. As a result, entrepreneurs receive no help from venture capital in avoiding the huge idiosyncratic risk of the typical venture-backed startup. Entrepreneurs earned an average of $9 million from each company that succeeded in attracting venture funding. But entrepreneurs are generally specialized in their own companies and bear the burden of the idiosyncratic risk. Entrepreneurs with a coefficient of relative risk aversion of two would be willing to sell their interests for less than $1 million at the outset rather than face that risk. The standard financial contract provides entrepreneurs capital supplied by passive investors and rewards entrepreneurs for successful outcomes. We track the division of value for a sample of the great majority of U.S. venture-funded companies over the period form 1987 through 2005. Venture capitalists received an average of $5 million in fee revenue from each company they backed. The outside investors in venture capital received a financial return substantially above that of publicly traded companies, but that the excess is mostly a reward for bearing risk. The pure excess return measured by the alpha of the Capital Asset Pricing Model is positive but may reflect only random variation"--National Bureau of Economic Research web site."@en ;
    schema:exampleOfWork <http://worldcat.org/entity/work/id/197799097> ;
    schema:inLanguage "en" ;
    schema:isPartOf <http://experiment.worldcat.org/entity/work/data/197799097#Series/working_paper_series_national_bureau_of_economic_research_online> ; # Working paper series (National Bureau of Economic Research : Online) ;
    schema:isPartOf <http://experiment.worldcat.org/entity/work/data/197799097#Series/nber_working_paper_series> ; # NBER working paper series ;
    schema:name "The incentives to start new companies : evidence from venture capital"@en ;
    schema:productID "123414691" ;
    schema:publication <http://www.worldcat.org/title/-/oclc/123414691#PublicationEvent/cambridge_ma_national_bureau_of_economic_research_2007> ;
    schema:publisher <http://experiment.worldcat.org/entity/work/data/197799097#Agent/national_bureau_of_economic_research> ; # National Bureau of Economic Research
    schema:url <http://papers.nber.org/papers/w13003> ;
    schema:url <http://0-papers.nber.org.biblio.eui.eu/papers/> ;
    schema:url <http://papers.nber.org/papers/w13056> ;
    wdrs:describedby <http://www.worldcat.org/title/-/oclc/123414691> ;
    .


Related Entities

<http://experiment.worldcat.org/entity/work/data/197799097#Agent/national_bureau_of_economic_research> # National Bureau of Economic Research
    a bgn:Agent ;
    schema:name "National Bureau of Economic Research" ;
    .

<http://experiment.worldcat.org/entity/work/data/197799097#Organization/national_bureau_of_economic_research> # National Bureau of Economic Research.
    a schema:Organization ;
    schema:name "National Bureau of Economic Research." ;
    .

<http://experiment.worldcat.org/entity/work/data/197799097#Person/hall_robert_e_robert_ernest_1943> # Robert Ernest Hall
    a schema:Person ;
    schema:birthDate "1943" ;
    schema:familyName "Hall" ;
    schema:givenName "Robert Ernest" ;
    schema:givenName "Robert E." ;
    schema:name "Robert Ernest Hall" ;
    .

<http://experiment.worldcat.org/entity/work/data/197799097#Place/cambridge_ma> # Cambridge, MA
    a schema:Place ;
    schema:name "Cambridge, MA" ;
    .

<http://experiment.worldcat.org/entity/work/data/197799097#Series/nber_working_paper_series> # NBER working paper series ;
    a bgn:PublicationSeries ;
    schema:hasPart <http://www.worldcat.org/oclc/123414691> ; # The incentives to start new companies : evidence from venture capital
    schema:name "NBER working paper series ;" ;
    .

<http://experiment.worldcat.org/entity/work/data/197799097#Series/working_paper_series_national_bureau_of_economic_research_online> # Working paper series (National Bureau of Economic Research : Online) ;
    a bgn:PublicationSeries ;
    schema:hasPart <http://www.worldcat.org/oclc/123414691> ; # The incentives to start new companies : evidence from venture capital
    schema:name "Working paper series (National Bureau of Economic Research : Online) ;" ;
    .

<http://id.loc.gov/authorities/subjects/sh2008113185> # Venture capital--United States
    a schema:Intangible ;
    schema:name "Venture capital--United States"@en ;
    .

<http://id.worldcat.org/fast/1165298> # Venture capital
    a schema:Intangible ;
    schema:name "Venture capital"@en ;
    .

<http://id.worldcat.org/fast/1204155> # United States.
    a schema:Place ;
    schema:name "United States." ;
    .

<http://viaf.org/viaf/72466783> # Susan E. Woodward
    a schema:Person ;
    schema:familyName "Woodward" ;
    schema:givenName "Susan E." ;
    schema:name "Susan E. Woodward" ;
    .


Content-negotiable representations

Close Window

Please sign in to WorldCat 

Don't have an account? You can easily create a free account.