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- W3095402783 abstract "This study develops a continuous time model to examine a complete two-stage decision process for venture capitals (VCs), including investment in the private market at Stage 1 and exit through IPO in the public market at Stage 2. Optimal timings, investment terms, and exit decisions are investigated using the real options game theory under two cases: the same required returns in the public and private markets and a higher required return in the private market than in the public market. Our results indicate that the same required returns in the public and private markets generate an optimal investment decision at Stage 1 without relation to the exit decision in Stage 2. However, when the required return in the private market is higher than that in the public market, the exit decision will influence the investment decision. The size of the initial capital, ownership structure, growth rate and risk of industry, required returns in public and private capital markets, extent of lock-up period price pressure, and transaction costs of financing are important factors influencing the equilibrium results." @default.
- W3095402783 created "2020-11-09" @default.
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- W3095402783 date "2021-01-01" @default.
- W3095402783 modified "2023-10-02" @default.
- W3095402783 title "The dynamic investment and exit decisions of venture capitals" @default.
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- W3095402783 doi "https://doi.org/10.1016/j.najef.2020.101300" @default.
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