À繫¿¬±¸ Á¦ ±Ç È£ (2017³â 5¿ù)
Asian Review of Financial Research, Vol., No..
pp.684~693
pp.684~693
Startup Financing and Capital Structure : A Signaling Approach
Guangsug Hahn Division of Humanities and Social Sciences, POSTECH, Korea
Joon Yeop Kwon Division of Humanities and Social Sciences, POSTECH, Korea
We construct a single-stage startup financing model, in which the entrepreneur strategically chooses debt-equity ratio as a signaling device in order to inform his project value to the investors. In our model, there is a penniless entrepreneur who plans an innovative project and he seeks for seed investment to launch the project. Based on the entrepreneur¡¯s choice of capital structure, investors evaluate the project value. In particular, debt investors determine required return while equity investors ask their equity share for a given amount of investment. We allow for endogenous probability of bankruptcy which increases in the amount of debt as in Ross (1977).
Guangsug Hahn
Joon Yeop Kwon
We construct a single-stage startup financing model, in which the entrepreneur strategically chooses debt-equity ratio as a signaling device in order to inform his project value to the investors. In our model, there is a penniless entrepreneur who plans an innovative project and he seeks for seed investment to launch the project. Based on the entrepreneur¡¯s choice of capital structure, investors evaluate the project value. In particular, debt investors determine required return while equity investors ask their equity share for a given amount of investment. We allow for endogenous probability of bankruptcy which increases in the amount of debt as in Ross (1977).