Working Paper
Public Policy for Start-up Entrepreneurship with Venture Capital and Bank Finance
Christian Keuschnigg, Søren Bo Nielsen
CESifo, Munich, 2003
CESifo Working Paper No. 850
CESifo, Munich, 2003
CESifo Working Paper No. 850
This paper proposes and analyses a model of start-up investment. Innovative entrepreneurs are commercially inexperienced and can benefit from venture capital support. Only part of them succeed in matching with a venture capitalist while the rest must resort to standard bank finance. We consider a number of policies to promote entrepreneurship and venture capital backed innovation.
Keywords: venture capital bank finance, matching, moral hazard, public policy