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dc.contributor.authorBlazenko, George W.en_US
dc.contributor.authorPavlov, Andrey D.en_US
dc.date.accessioned2012-03-15T14:00:47Z-
dc.date.available2012-03-15T14:00:47Z-
dc.date.issued2010en_US
dc.identifier.citationJournal of Entrepreneurial Finance, JEF 1551-9570 14 2010 3 37-68en_US
dc.identifier.urihttp://hdl.handle.net/10419/55912-
dc.description.abstractA key requirement for the start of many entrepreneurial businesses is private equity or venture capital financing. In the traditional approach to entrepreneurial investment analysis, an entrepreneur starts a new venture and a venture capitalist finances the new venture when business return exceeds the financial opportunity cost for comparable risk the cost of capital for the new venture. The real options literature recommends that entrepreneurs delay business start due to investment irreversibility until business return reaches a threshold greater than the cost of capital. In this paper, we show that for new ventures with modest earnings volatility, an entrepreneur starts his/her business before return exceeds the cost of capital. We identify the circumstances in which the cost of capital is an unduly conservative return benchmark for the start of a new business and discuss the empirical implications of our findings.en_US
dc.language.isoengen_US
dc.publisherMontrose, California Academy of Entrepreneurial Finance - AEFen_US
dc.subject.ddc330en_US
dc.subject.keywordnew venturesen_US
dc.subject.keywordbusiness starten_US
dc.subject.keywordcorporate investmenten_US
dc.titleInvestment timing for new business venturesen_US
dc.typeArticleen_US
dc.identifier.ppn663311144en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:The Journal of Entrepreneurial Finance (JEF)

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