Start-ups, venture capitalists, and the capital gains tax

• 成果类型: Article; Proceedings Paper
• 署名作者: Keuschnigg, C; Nielsen, SB
• 署名单位: University of St Gallen; Copenhagen Business School
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(03)00046-X
• 发表日期: 2004
• 页码: 1011-1042
• 关键词: venture capital; capital gains taxation; double moral hazard

摘要

A model of start-up finance with double moral hazard is proposed. Entrepreneurs have ideas and technical competence, but lack own resources as well as commercial experience. Venture capitalists (VCs) provide start-up finance and managerial support. Both types of agents thus jointly contribute to the firm's success, but neither type's effort is verifiable. We find that the market equilibrium is biased towards inefficiently low entrepreneurial effort and venture capital support. In this situation, the capital gains tax is particularly harmful. The introduction of a small tax impairs effort and advice and leads to a first-order welfare loss. Several other policies towards venture capital and start-up entrepreneurship are also investigated. (C) 2003 Elsevier B.V. All rights reserved.