Resolving Tensions Between Heterogeneous Investors in a Startup

• 成果类型: Article
• 署名作者: Chen, Shiqi; Lambrecht, Bart M.
• 署名单位: Lancaster University; University of Cambridge; Centre for Economic Policy Research - UK
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.01724
• 发表日期: 2025
• 关键词: investment; PAYOUT; startup; risk preferences; group policy

摘要

Legal scholars highlight the tensions that exist between different classes of shareholders in startups. We model a startup owned by undiversified investors with heterogeneous capital contributions and risk preferences. A social planner runs the firm on behalf of all investors. We compare investors' expected utility with a hypothetical first-best decentralized benchmark. The startup's optimal investment policy is procyclical and a time-varying weighted average of shareholders' optimal investment policies. The optimal contracts issued to investors are tailor-made, interdependent, and include equity claims resembling preferred stock with heterogeneous payout caps, leading to a complex capitalization table as more investors join the startup.