Dissertation > Economic > Fiscal, monetary > Finance, banking > Finance, banking theory > Investment

The Research of Double Principal-agent of Venture Capital

Author MuYing
Tutor ZhangXinLi
School Liaoning Normal University
Course Applied Mathematics
Keywords Venture Capital Dual agency Moral hazard
CLC F830.59
Type Master's thesis
Year 2011
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Venture capital is a kind of high-tech and emerging industries have great potential for development investment . It is the most important high-tech industry cluster development momentum . Venture Capital participating subjects are three: venture capitalists , entrepreneurs, venture capitalists and risk . The entire risk of the investment process can be seen as a dual agency relationship : the risk between investors and venture capitalists, the first tier of the agency and the venture capitalists and entrepreneurs, the risk weight between the second agency . As risk investment with professional, high-risk features, easy to make principal and agent between the serious problem of information asymmetry , making principal-agent problem has become very prominent. In this double agent process, venture capitalists are essential. Therefore , this paper to study the venture capitalists in the process of dual importance of the agency as the main target , by studying the problem of moral hazard and incentives were established single- and dual venture capital model . Central element is the study of how to solve the dual agency in a variety of problems, such as moral hazard and improve the level of effort and other issues. Firstly, in Mirrlees and Holmstrom model and theoretical framework , based on the ability of venture capitalists and entrepreneurs risk level of effort into survival and cost function constructed single- and dual risk investment agency model . In the venture capital singlet agency process , assuming that only venture capitalists and entrepreneurs to participate in the risk analyzes the moral hazard risks entrepreneurs and incentive mechanism. Dual agency in the process of venture capital , venture capital investors , venture capitalists, entrepreneurs risk tripartite form a dual agency relationship . Addressing moral hazard risk investment and incentive mechanism , calculated venture capitalists this case the optimal effort level and so on. Secondly, the two models optimal effort level and the comparison of the proportion of remuneration paid to emphasize the superiority of dual agency , which discussed the venture capitalists invest in risk during the important role of venture capital and answer why the process dual agency relationship exists the problem .

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