Article

Venture Capital Staging: Domestic Versus Foreign Vc-Led Investments

Yong Li

in The Oxford Handbook of Venture Capital

Published in print April 2012 | ISBN: 9780195391596
Published online September 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780195391596.013.0012

Series: Oxford Handbooks

 Venture Capital Staging: Domestic Versus Foreign Vc-Led Investments

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This article serves two purposes: to review how the agency and real options perspectives inform us about the venture capital staging decision, and to examine whether the staging decision differs between domestic venture capitalist (VC)-led and foreign VC-led investment projects. The article proceeds as follows. First, it reviews how agency theory informs venture capital staging decisions and analyzes whether domestic VCs and foreign VCs differ in using staged financing to address agency concerns. Then it considers how real options theory informs venture capital staging decisions, and examines whether domestic VCs and foreign VCs differ in using staged financing to tackle project-specific uncertainty and market volatility. It discusses the methods for the empirical test and presents empirical results. It concludes with a discussion of the study for research and practice.

Keywords: venture capital staging; venture capitalists; investment projects; staged financing; agency theory; real options theory

Article.  7106 words. 

Subjects: Economics ; Financial Markets

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