The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit Decision
Normally entrepreneur would raise fund from angel investors during the initial round. If the venture program was by then successful, the entrepreneur would then continue the fund-raising process from venture capitalist. By adopting the convertible preferred stock, we managed to construct the two-sta...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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Wiley
2018-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2018/7902985 |
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| _version_ | 1832551595735252992 |
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| author | Kaihong Wang Yin Mingyang Zuo Jiani |
| author_facet | Kaihong Wang Yin Mingyang Zuo Jiani |
| author_sort | Kaihong Wang |
| collection | DOAJ |
| description | Normally entrepreneur would raise fund from angel investors during the initial round. If the venture program was by then successful, the entrepreneur would then continue the fund-raising process from venture capitalist. By adopting the convertible preferred stock, we managed to construct the two-stage angel investment decision process. This research reveals the following: (1) The probability of the first stage’s success has negative relationships with levels of priority dividend in both first and second stages, as well as with the venture capitalist’s proportion of shares. (2) The probability of the second stage’s success has negative relationships with the venture capitalist’s proportion of shares and the dividend level of both first and second stage funding. (3) There has been a threshold of dividend distribution, which belongs to angel investor. While the level of angel investor’s shares is higher than the threshold, AN would decide to join the second phase of the program; otherwise, AN would exit the project at the end of the first stage. |
| format | Article |
| id | doaj-art-2cfb16b95584444787ec2b799a18bcdd |
| institution | Kabale University |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2018-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-2cfb16b95584444787ec2b799a18bcdd2025-02-03T06:01:07ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2018-01-01201810.1155/2018/79029857902985The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit DecisionKaihong Wang0Yin Mingyang1Zuo Jiani2Research Institute of Financial Mathematics, Southwestern University of Finance and Economics, Cheng Du 610074, ChinaSchool of Business Administration, Southwestern University of Finance and Economics, Cheng Du 610074, ChinaResearch Institute of Financial Mathematics, Southwestern University of Finance and Economics, Cheng Du 610074, ChinaNormally entrepreneur would raise fund from angel investors during the initial round. If the venture program was by then successful, the entrepreneur would then continue the fund-raising process from venture capitalist. By adopting the convertible preferred stock, we managed to construct the two-stage angel investment decision process. This research reveals the following: (1) The probability of the first stage’s success has negative relationships with levels of priority dividend in both first and second stages, as well as with the venture capitalist’s proportion of shares. (2) The probability of the second stage’s success has negative relationships with the venture capitalist’s proportion of shares and the dividend level of both first and second stage funding. (3) There has been a threshold of dividend distribution, which belongs to angel investor. While the level of angel investor’s shares is higher than the threshold, AN would decide to join the second phase of the program; otherwise, AN would exit the project at the end of the first stage.http://dx.doi.org/10.1155/2018/7902985 |
| spellingShingle | Kaihong Wang Yin Mingyang Zuo Jiani The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit Decision Discrete Dynamics in Nature and Society |
| title | The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit Decision |
| title_full | The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit Decision |
| title_fullStr | The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit Decision |
| title_full_unstemmed | The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit Decision |
| title_short | The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit Decision |
| title_sort | two stage model of entrepreneurs financing based on the entry exit decision |
| url | http://dx.doi.org/10.1155/2018/7902985 |
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