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Friends or Foes: The Interrelationship between Angel and Venture Capital Markets / Thomas F. Hellmann, Veikko Thiele.
- Format:
- Book
- Author/Creator:
- Hellmann, Thomas F.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w20147.
- NBER working paper series no. w20147
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Friends or Foes
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2014.
- Summary:
- This paper develops a theory of how angel and venture capital markets interact. Entrepreneurs first receive angel then venture capital funding. The two investor types are 'friends' in that they rely upon each other's investments. However, they are also 'foes', because at the later stage the venture capitalists no longer need the angels. Using a costly search model we derive the equilibrium deal flows across the two markets, endogenously deriving market sizes, competitive structures, valuation levels, and exit rates. We discuss how the model generates alternative testable hypotheses for the recent rise of angel investing.
- Notes:
- Print version record
- May 2014.
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