Max Planck Institute for Innovation and Competition, Munich, Room 313
Staged financing of start-ups can be achieved with different investor constellations. One is that companies obtain funding from different investors at different stages. Another is that a deep pocketed investor continues investing in the company across multiple stages, usually as part of a syndicate. The valuation of start-ups is influenced by investor constellations, in particular strategic interactions between outside investors and deep-pocketed insiders. Our theory models the investment choices and valuations of start-ups, deriving advantages and disadvantages of deep pocketed investors. The analysis explains the significance of pro-rata investments, and the role of pre-emptive rights.
Contact person: Felix Pöge
Seminar
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08/30/2017
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12:00 PM
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01:30 PM
Brown Bag Seminar: Deep Pockets and Valuation of Start-ups
Veikko Thiele (Queen's University)