financial contracting theory meets the real world an empirical analysis of venture capital contracts we compare the characteristics of real world financial contracts to their counterparts in financial contracting theory we do so by studying the actual contracts between venture capitalists vcs and entrepreneurs the distinguishing characteristic of vc financings is that they allow vcs to separately allocate cash flow rights board rights voting rights liquidation rights and other control rights we describe and measure these rights we then interpret our results in relation to existing financial contracting theories we also describe the interrelation and the evolution across financing rounds of the different rights query 1 query 2

ngos in bangladesh activities resources and governance summary this paper reports results from one of the first large nationally representative surveys of non governmental organizations ngos in a developing country the ngo sector in bangladesh is highly organized and relatively homogeneous most ngos utilize a branch and headquarters structure in which branches have limited autonomy from headquarters at the branch level most ngos in the country whether big or small focus on credit services derive more of their income from fees for services than from grants rely on salaried rather than voluntary staff keep detailed financial accounts that are externally audited and hire middle class college educated men as managers the convergence to a modal institutional form probably is the result of the persuasive power of ideas sociological pressures toward acculturation and conformity as well as material incentives

measuring gross flows in the labor force an overview of a special conference the measurement of flows in the american labor market has challenged researchers for years several problems including response variability rotation group bias and matching errors hinder accurate measurement of the flows the bureau of the census and the bureau of labor statistics jointly sponsored a conference to examine these problems present current research on solutions to the problems and submit recommendations for improving the data recommendations include procedural changes in the current population survey as well as new estimation techniques

estimation of current quarter gross national product by pooling preliminary labor market data two methods of using labor market data as indicators of contemporaneous gross national product gnp are developed the establishment survey data are used by inverting a partial adjustment equation for hours a second gnp forecast can be extracted from the household survey by using okun s law using preliminary rather than final data adds about 2 to 4 percentage point to the expected value of the root mean squared errors and changes the weights that the pooling procedure assigns to the two forecasts the use of preliminary rather than final data results in a procedure that assigns more importance to the okun s law forecast

post 1500 population flows and the long run determinants of economic growth and inequality we construct a matrix showing the share of the year 2000 population in every country that is descended from people in different source countries in the year 1500 using this matrix we analyze how post 1500 migration has influenced the level of gdp per capita and within country income inequality in the world today indicators of early development such as early state history and the timing of transition to agriculture have much better predictive power for current gdp when one looks at the ancestors of the people who currently live in a country than when one considers the history on that country s territory without adjusting for migration measures of the ethnic or linguistic heterogeneity of a country s current population do not predict income inequality as well as measures of the ethnic or linguistic heterogeneity of the current population s ancestors an even better predictor of current inequality in a country is the variance of early development history of the country s inhabitants with ethnic groups originating in regions having longer histories of agriculture and organized states tending to be at the upper end of a country s income distribution however high within country variance of early development also predicts higher income per capita holding constant the average level of early development

limited attention and the role of the venture capitalist abstract this research analyzes the venture capitalist s incentives to maximize the profits of the entrepreneurs of ventures and the limited partners of a venture fund venture capital is a professionally managed pool of capital invested in equity linked private ventures entrepreneurs turn to venture capitalists for financing because high technology startup firms have low or negative cash flows which prevent them from borrowing or issuing equity in addition venture capitalists are actively involved in management of the venture to assure its success this solves the problem of startup firms that do not have the cash flows to hire management consultants venture capital contracts have three main characteristics 1 staging the commitment of capital and preserving the option to abandon 2 using compensation systems directly linked to value creation and 3 preserving ways to force management to distribute investment proceeds these characteristics address three fundamental problems 1 sorting the venture capital among the entrepreneurial ventures 2 providing incentives to motivate venture capitalists to maximize the value of the funded ventures and 3 providing incentives to motivate entrepreneurs to maximize the value of the ventures venture capitalists fund only about a dozen projects a year out of a thousand evaluated each project may receive several rounds of financing payoffs to vcs can be very high or be a complete loss the typical venture capital vc firm is organized as a limited partnership with the venture capitalists serving as general partners and the investors as limited partners general partner vcs act as agents for the limited partners in investing their funds vcs invest their human capital by placing their reputation on the line the goal is to begin to convert the investment into cash or marketable securities which are distributed to the partners vc management companies receive a management fee equal to a percentage usually 2 5 of the capital of each fund they also receive a percentage 15 30 of the profits of each fund called carried interest periodic reports are made by the vc firm to the limited partners usually these are only costs of managing the fund and so revenues are negative most contracts specify the percentage of time that the vc will devote to managing the fund the analysis of this research deals with the incentives of the vc who has limited attention to be allocated between improving current ventures and evaluating new ventures for possible funding the analysis shows that the vc as agent for both the entrepreneur and the general partners does not have the incentives required to maximize their profits the vc allocates attention among ventures and venture funds less frequently than required to maximize the entrepreneurs and limited partners profits however the vc does maximize the total profits of all ventures because the vc considers the opportunity cost of attention the vc s allocation of attention is efficient the implication of this result is that although the entrepreneurs and limited partners could be made better off with a different allocation of the vc s time this would be an inefficient use of the vc s time

the economics of moonlighting a double self selection model the model proposed here for obtaining the labor supply functions of moonlighters uses a double self selection system to explore the husband s decision to moonlight together with his wife s decision to work subsequently the labor functions are classified under two regimes depending on whether the wife works the model is estimated based on a cross section of 4 448 married couples from the survey of income and program participation wave 2 i find that the household production time of husbands and wives are substitutes and that specific human capital deters moonlighting copyright 1990 by mit press

a multi period game theoretic model of venture capitalists and entrepreneurs abstract this study examines the relationship between a venture capitalist and an entrepreneur and follows it from its inception to the exit stage the model we use is a multi period game theoretic model with moral hazard where the contract is set in the first period the contribution of the study lies in the insights it provides on optimal contracts and its characterization of an endogenous exit point specifically the paper shows that the optimal incentive scheme should backload all incentive payments to the entrepreneur as much as possible consequently a straight debt contract would be optimal in venture financing

contracting signaling and moral hazard a model of entrepreneurs angels and venture capitalists abstract investment by wealthy individuals known as angels in startup firms is quite significant and has taken off in the last few years angels invest in the company at an earlier stage than venture capitalists vcs do this paper examines the relationship between an entrepreneur an angel and a vc from the seed investment made by the angel to the exit stage the study characterizes the equilibrium contracts among the players and provides insights into the related institutional arrangements next the study examines the signaling aspects of the game the paper also analyzes the moral hazard problems of the entrepreneur and the vc it shows that the outcome in a startup firm is not efficient because of the free rider phenomenon

the effect of capital market characteristics on the value of start up firms we develop an equilibrium model of contracting bargaining and search in which the relative scarcity of venture capital affects the bargaining power of entrepreneurs and venture capitalists this in turn affects the pricing contracting and value creation in start ups the relative scarcity of venture capital is endogenous and depends on the profitability of venture capital investments entry costs and transparency of the venture capital market supply and demand conditions also affect the incentives of venture capitalists to screen projects ex ante we characterize both the short and long run dynamics of the venture capital industry which provides us with a stylized picture of the internet boom and bust periods our model is consistent with existing evidence and provides a number of new empirical predictions

stage financing and the role of convertible securities venture capital financing is characterized by extensive use of convertible securities and stage financing in a model where a venture capitalist provides staged financing for a project we illustrate an advantage of convertible debt or warrants over a mixture of debt and equity essentially when the venture capitalist retains the option to abandon the project the entrepreneur has an incentive to engage in window dressing and bias positively the short term performance of the project reducing the probability that it will be liquidated an appropriately designed convertible security prevents such behaviour because window dressing also increases the probability that the venture capitalist will exercise the conversion option becoming the owner of a substantial fraction of the project s equity

contracts and exits in venture capital finance using a sample of european venture capital vc investments i study the relation between vc contracts and exits the data indicate that ex ante stronger vc control rights increase the likelihood that an entrepreneurial firm will exit by an acquisition rather than through a write off or an ipo my findings are robust to controls for a variety of factors including endogeneity and cases in which the vc preplans the exit at the time of contract choice my findings are consistent with control based theories of financial contracting such as aghion and bolton 1992

effects of rotation group bias on estimation of unemployment previous analysis of rotation group bias in the current population survey has concluded that if the biases are additive the ratio and composite estimators of month to month change in unemployment are unbiased this article shows that if the biases contain a multiplicative aspect both estimators of change are then biased the article also presents some empirical results that cast doubt on the validity of a purely additive model

multiple job holding among male workers in greece livanos i and zangelidis a multiple job holding among male workers in greece regional studies this paper studies the incidence of multiple job holding in greece and contributes to the literature by examining its determinants its variance across different regions and the effect of the business cycle on its occurrence the empirical analysis highlights the importance of both pecuniary and non pecuniary motives behind multiple job holding and reveals significant variations in its incidence across regions with areas that have a large primary sector having higher multiple job holding rates finally multiple job holding is found to be pro cyclical with the probability of holding a second job estimated to increase during economic expansion livanos i et zangelidis a les emplois multiples masculins en grece regional studies l article cherche a etudier la frequence des emplois multiples en grece et contribue a la documentation en examinant ses determinants sa variance a travers les diverses regions

average of forecasts an improvement stein rules are used in forming combination forecasts such forecasts have smaller prediction risk under certain conditions than the preferred method of average of forecasts the new composite forecasts will be theoretically biased but are likely to have smaller mean squared error of forecasts as shown in the empirical exercises examined when the forecasts appear to be unbiased and have a common mean lindley type combination is most useful

the evolution of rotation group bias will the real unemployment rate please stand up we document that rotation group bias the tendency for the unemployment rate to vary systematically by month in sample in the current population survey cps has worsened over time estimated unemployment rates for earlier rotation groups have grown sharply relative to later rotation groups both should be nationally representative samples this bias increased discretely after the 1994 cps redesign and rising nonresponse rates are likely a significant contributor survey nonresponse increased after the redesign mirroring the evolution of rotation group bias consistent with this explanation rotation group bias for households that responded in all eight interviews remained stable over time

the dynamics of dual job holding and job mobility this article concerns dual job holding and its link to job mobility we present evidence from u s data on patterns of dual job holding hours changes and job mobility we find that workers move into and out of second jobs frequently that these movements are associated with large changes in work hours and that hours constraints may prompt workers to take second jobs second we review theories of dual job holding and present a stochastic dynamic model of dual job holding and job mobility in which decisions to take second jobs and or change main jobs are made simultaneously

peaceful coexistence the role of religious schools and ngos in the growth of female secondary schooling in bangladesh abstract bangladesh rural advancement committee brac a non governmental organisation ngo runs a large number of non formal primary schools in bangladesh which target out of school children from poor families these schools are well known for their effectiveness in closing the gender gap in primary school enrolment on the other hand registered non government secondary madrasas or islamic schools today enrol one girl against every boy student in this article we document a positive spillover effect of brac schools on female secondary enrolment in registered madrasas drawing upon school enrolment data aggregated at the region level we first show that regions that had more registered madrasas experienced greater secondary female enrolment growth during 1999 2003 holding the number of secular secondary schools constant in this context we test the impact of brac run primary schools on female enrolment in registered madrasas we deal with the potential endogeneity of placement of brac schools usin

preplanned exit strategies in venture capital abstract this paper empirically considers the role of preplanned exits the investor s initial strategy to sell the investee firm via an acquisition or an initial public offering ipo at the time of initial contract with the entrepreneur legal conditions and investor versus investee bargaining power in the allocation of cash flow and control rights in entrepreneurial finance we introduce a sample of 223 entrepreneurial investee firms financed by 35 venture capital funds in 11 continental european countries and these data indicate the following first preplanned acquisition exits are associated with stronger investor veto and control rights a greater probability that convertible securities will be used and a lower probability that common equity will be used the converse is observed for preplanned ipos second investors take fewer control and veto rights and use common equity in countries of german legal origin relative to socialist scandinavian and french legal origin third more experienced entrepreneurs are more likely to get financed with common equity and less likely to be financed with convertible preferred equity while more experienced investors are more likely to use convertible preferred equity and less likely to use common equity

emerging strategies in the venture capital industry abstract this article reports a study of the future direction of the venture capital industry by examining the basic strategies and strategic assumptions of a broad sample of venture capital firms there are three main sets of results first the once homogeneous venture capital industry is rapidly dividing into several different strategic groups members of these groups are increasingly distinguishing themselves from other groups on four basic dimensions followed by member firms 1 financial resources equity capital comes from a greater variety of sources five major sources resulting in fundamentally different demands on the mission of the receiving venture capital firm 2 staff resources the way venture capital firms use staff resources particularly regarding investee management assistance is becoming increasingly varied across different groups some firms provide fewer than 2 days per year while others provide up to 450 man days per year per client 3 venture stages while the overall industry retains a primary interest in stage 1 2 and 3 investment specific firms vary considerably in the distribution of investment emphasis across these three stages 4 use of financial resources firms in the industry are becoming increasingly differentiated in the size of minimum investments they make 100 m to 1000 m and in their role as a direct investor versus a broker for institutional funds practicing venture capitalists should make use of this first set of findings in two ways first they may find it useful to compare their firm s orientation along these four strategic dimensions with those of the firm s that comprised this study second they may seek to use these four strategic dimensions as a basis on which they might examine clarify and or redefine the marketing strategy pursued by their firm a second set of results identified three goals and priorities of venture capital firms that have neither changed over time nor across increasingly different strategic groups annualized after tax return on investments of between 25 and 40 remain the most common objective across all firms a 5 to 6 year investment time horizon and a major emphasis on the quality of the management team in evaluating new deals were universal priorities across diverse venture capital firms a third finding in this study was that venture capital firms profess greater certainty about the future direction of the venture capital industry than the direction of their firm the most notable example of this is a strong sense that industry wide rates of return are headed downward yet few senior partners expect their firm to experience this decline practicing venture capitalists may be interested to peruse these results to see what trends are predicted within the venture capital industry by this subsample of that industry second they should consider the finding that industry wide rates of return are headed downward in light of the first two sets of findings to develop their own opinion about the future performance of different strategic groups within the industry it is important to note that the sample of venture capital firms on which this study was based did not include most of the larger older funds some of these funds would be characterized as industry leaders pace setters and innovators the sample provides a solid representation of the broad middle of the venture capital industry and newer entrants into the industry while larger older funds are under represented their impact on future trends and strategies in the industry is captured to some extent in the set of questions about future direction of the venture capital industry finally the emerging strategic groups in the venture capital industry that were identified by this study may be useful information for investors as well as users of venture capital for investors the opportunity to participate in venture capital activity should become more clearly understood and varied basically this study should help investors differentiate the strategic posture of different venture capital firms and funds on four factors rather than simply industry geographic considerations for users of venture capital the results of this study suggest a possibility for multiple options that are both more accessible and more catered to specific needs users of venture capital should find a clearer basis on which to differentiate venture capital firms in terms of venture stage priorities staff utilization orientations sources and uses of financial resources this should make for more informed shopping among different venture capital sources and provide a basis on which to shop for the most compatible firm

the puzzling pattern of multiple job holding across u s labor markets multiple job holding mjh rates differ substantially across u s regions states and metropolitan areas rates decrease markedly with respect to labor market size these patterns have been largely overlooked despite being relatively fixed over at least the past 20 years this article explores explanations for these persistent differences we account for roughly two thirds of the mean absolute deviation in mjh across local labor markets msas the results suggest that variation in mjh across labor markets is driven by labor market differences in job opportunities and worker preferences most important in explaining variation in mjh are msa industry and occupation structure ancestry shares commute times and to a lesser extent labor market churn

thick market effects and churning in the labor market evidence from u s cities using u s census microdata we show that on average workers change occupation and industry less in more densely populated areas the result is robust to standard demographic controls as well as to including aggregate measures of human capital and sectoral mix analysis of the displaced worker surveys shows that this effect is present in cases of involuntary separation as well on the other hand we actually find the opposite result higher rates of occupational and industrial switching for the subsample of younger workers these results provide evidence in favor of increasing returns to scale matching in labor markets results from a back of the envelope calibration suggest that this mechanism has an important role in raising both wages and returns to experience in denser areas

a theory of strategic venture investing some venture capital investors seek purely financial gains while others such as corporations also pursue strategic objectives the paper examines a model where a strategic investor can achieve synergies but can also face a conflict of interest with the entrepreneur if the start up is a complement to the strategic partner it is optimal to obtain funding from the strategic investor if the start up is a mild substitute the entrepreneur prefers an independent venture capitalist with a strong substitute syndication becomes optimal such that the independent venture capitalist is the active lead investor and the strategic partner a passive co investor the expected returns for the entrepreneur are nonmonotonic lowest for a mild substitute and higher for a strong substitute as well as for a complement the paper also explains why a strategic investor often pays a higher valuation than an independent venture capitalist

specialist versus generalist investors trading off support quality investment horizon and control rights abstract we model an entrepreneur s selection of either an active specialist or a passive generalist investor for an innovative venture that requires external equity for startup and expansion financing we assume that the specialist investor provides better support but has a shorter investment horizon than the generalist we particularly focus on the entrepreneur s net present value npv maximizing contract taking into account the specialist s potential moral hazard this latter might try selling his claim in a secondary transaction to an uninformed outside investor even though the project is unsuccessful and should be abandoned we show that the entrepreneur may trade off crucial contract parameters when seeking external financing either type of investor may be preferable contingent on the allocation of control rights the investor s support quality and investment horizon the chances of success and the venture s expected liquidation value

moonlighting over the business cycle i introduction during economic downturns employment levels fall unemployment rates increase and real wages drop as such real wages are considered somewhat procyclical yet very little is known about the cyclicality of multiple job holding from a graphical analysis of national time series moonlighting data during the 1960s and 1970s stinson 1987 finds evidence of large increases in moonlighting during expansionary periods likewise partridge s 2002 findings support the possibility of procyclical multiple job holding yet the popular media and employment think tanks discuss moonlighting as a by product of financial pressures 1 furthermore the idea that individuals may hold multiple jobs during an economic downturn in order to supplement family income is consistent with the so called added worker effect in the labor economics literature why should we care about the cyclicality of multiple job holding in the economy there are numerous reasons first moonlighting has played and can be expected to continue to play a visible role in the u s workforce the moonlighting rate was 5 2 as of 1970 with 7 0 of male workers and 2 2 of female workers holding multiple jobs this moonlighting rate remained practically unchanged over the course of the next 30 yr yet its gender incidence did fluctuate in particular the female moonlighting rate grew over the past several decades from the above listed 2 2 in 1970 to 3 8 in 1980 and to 5 9 in 1991 and exceeded the male rate for the first time in 1995 6 5 vs 6 3 in may 2007 the moonlighting rate was still similar to the moonlighting rate in 1970 i e 5 3 although now females are much more likely to moonlight than men with rates of 4 9 vs 5 7 2 considered over the course of an entire year vs at a point in time an even larger percent age of workers hold second jobs in this regard paxson and sicherman 1996 p 357 note that approximately 20 of male workers and 12 2 of female workers hold second jobs in any given year 3 as these numbers suggest moonlighting is a substantively important labor market phenomenon however it is much understudied in fact our review of the literature to follow will show that only a handful of research papers have studied this phenomenon thus our primary motivation for writing the paper is to shed light on a poorly understood yet numerically important feature of the labor market a second reason for examining the cyclicality of multiple job holding is the potential importance of moonlighting in facilitating labor supply adjustments during temporary economic downturns or upturns 4 through a description of moonlighters our analysis will shed light on how workers respond to fluctuations in job opportunities across the business cycle macroeconomists and labor micro economists have long studied employment cyclicality in an attempt to improve the explanations of the changing composition of the labor force over business cycles for example the added and discouraged worker effects 5 third as one part of the broader picture of economic cyclicality our study fits nicely into the ongoing debate concerning the cyclicality of real wages 6 considerable research effort has been devoted to understanding the nature of real wage fluctuations across business cycles yet these studies are muddied by a glossing lack of distinction between workers average real wages across all jobs and their wages in the primary job alone understanding the role that moonlighting may play in employment cyclicality may inform the debate concerning the measurement of real wages when studying real wage cyclicality a final and policy relevant motivation for this research refers to the structure of employment taxes affecting secondary jobs as explained by anderson and meyer 2003 unemployment insurance ui payroll taxes are highly regressive in large part because benefits are structured in the same way

rotation group bias in measures of multiple job holding reported multiple job holding rates in the u s are found to be substantially higher among workers in their first month in the cps sample the first rotation group with rates declining in subsequent rotation groups true rates should not differ across rotation groups using 22 years of cps data multiple job holding rates based solely on the first rotation group were 27 5 percent higher than official rates based on all rotation groups rotation group bias worsened over time and could account for as much as one quarter of the measured decline in multiple job holding

optimal leverage and aggregate investment we analyze the optimal financing of investment projects when managers must exert unobservable effort and can also switch to less profitable riskier ventures optimal financial contracts can be implemented by a combination of debt and equity when the risk shifting problem is the most severe while stock options are also needed when the effort problem is the most severe worsening of the moral hazard problems leads to decreases in investment and output at the macroeconomic level moreover aggregate leverage decreases with the risk shifting problem and increases with the effort problem

does legal enforcement affect financial transactions the contractual channel in private equity analyzing 210 developing country private equity investments we find that transactions vary with nations legal enforcement whether measured directly or through legal origin investments in high enforcement and common law nations often use convertible preferred stock with covenants in low enforcement and civil law nations private equity groups tend to use common stock and debt and rely on equity and board control transactions in high enforcement countries have higher valuations and returns while relying on ownership rather than contractual provisions may help to alleviate legal enforcement problems these results suggest that private solutions are only a partial remedy

venture capital and high technology entrepreneurship abstract venture capital clearly plays an important role in high technology entrepreneurship the purpose of this article is to explain the differences among various venture capital complexes focusing on where venture capital is important to innovation and entrepreneurship and conversely where it is not we do so through an empirical and historical examination of the seven most important venture capital complexes california san francisco silicon valley massachusetts boston new york illinois chicago texas connecticut and minnesota minneapolis we establish a three part tripartite typology for explaining the differences between these venture capital complexes 1 technology oriented complexes are located close to concentrations of high technology intensive businesses invest most of their funds locally and are net attractors of capital 2 finance oriented complexes are located around financial institutions and export their capital and 3 hybrid complexes mix characteristics of both technology and finance oriented venturing our findings have a series of important practical implications although venture capital is not absolutely necessary to facilitate high technology entepreneurship well developed venture capital networks provide tremendous incentives for entrepreneurship by lowering the difficulties of entering an industry venture capitalists use both their experience and their contacts to reduce many of the information and opportunity costs associated with new business formation the importance of contact networks and information to both deal flow and investment monitoring goes a low way toward explaining why venture capitalists cluster tightly together the availability of venture capital also attracts entrepreneurs and high quality personnel to a region creating a virtuous circle of new enterprise formation innovation and economic development private nonprofit and subsidized public efforts aimed at providing venture capital and stimulating high technology entrepreneurship must confront the fact that venture capital alone will not magically generate entrepreneurship and economic development it is important that such efforts recognize the nonfinancial side of venture investing and attract experienced personnel who can tap into established entrepreneurial networks and secure coinvestors more significantly establishing public venture funding in an area lacking the requisite entrepreneurial climate or technology infrastructure may create a catch 22 situation where locally oriented funds invest in bad deals or where venture capital is simply exported to established high technology regions

here comes the rain again weather and the intertemporal substitution of leisure i revisit the intertemporal labor supply framework using exogenous variations in daily weather to see how time at work varies with rain in my model a rainy day is associated with a lower enjoyment of leisure effectively increasing wages and bringing more hours at work i test the model using data from the american time use survey supplemented with daily weather i find that on rainy days men shift on average 30 minutes from leisure to work computations give a rough estimate of the intertemporal elasticity of labor supply of around 0 01 in line with the rest of the literature

entrepreneurial ability venture investments and risk sharing a number of issues that relate to the desirability and implications of new venture financing are examined within a principal agent framework that captures the essence of the relationship between entrepreneurs and venture capitalists the model suggests 1 as long as the skill levels of entrepreneurs are common knowledge all will choose to involve venture capital investors since the risk sharing provided by outside participation dominates the agency relationship that is created 2 the less able entrepreneurs will choose to involve venture capitalists whereas the more profitable ventures will be developed without external participation because of the adverse selection problem associated with asymmetric information 3 if a costly signal is available that conveys the entrepreneur s ability some entrepreneurs will invest in such a signal and then sell to investors these entrepreneurs however need not be the more able ones the implications for new venture financing of these and other findings are discussed and illustrated by example

how venture capital firms differ abstract four potential sources of differences between venture capital vc firms were examined venture stage of interest amount of assistance provided by the vc vc firm size and geographic region where located through a questionnaire 149 venture capitalists provided data about their firms about what they look for in evaluating an investment and about how they work with a portfolio company following an investment firms were divided into four groups based on venture stage of interest the earlier the investment stage the greater the interest in potential investments built upon proprietary products product uniqueness and high growth markets late stage investors were more interested in demonstrated market acceptance there were no differences by stage regarding the desired qualities of management however after the investment was made earlier stage investors attached more importance to spending their time evaluating and recruiting managers earlier stage investors sought ventures with higher potential returns a 42 hurdle rate of return for the earliest stage investor versus 33 for the late stage investor late stage investors spent more time evaluating a potential investment however after the investment was made there was little difference in the amount of time spent assisting the portfolio company there were however differences in the significance that vcs attached to particular post investment activities firms were split into three groups based upon the amount of time the vc spent with a portfolio company after an investment was made as lead investor the most active group averaged over 35 hours per month per investment and the least active group averaged less than seven hours the difference in assistance provided was not strongly tied to differences in investment stage of interest there were major differences in the importance the vcs attached to their post investment activities not surprisingly high involvement vcs viewed their activities as more important based upon the amount of capital they managed firms were also split into three groups average fund size varied from 278 to 12 million dollars the larger firms had more professionals and managed more money per professional the large firms provided the least and the medium sized firms the most assistance to portfolio companies large firms also made larger individual investments even though they invested over half their funds in late stage investments whereas smaller firms focused on the earlier stages the large firms were still a major source of early stage financing there were no differences between geographic regions in the proportion of investments where the venture capital firm served as lead investor there were however major regional differences in investment stages of interest also differences were observed between regions that were not a result of differing size and investment stage

exploring differences in employment between household and establishment data using a large data set that links individual current population survey cps records to employer reported administrative data we document substantial discrepancies in basic measures of employment status that persist even after controlling for known definitional differences between the two data sources we hypothesize that reporting discrepancies should be most prevalent for marginal workers and for marginal or nonstandard jobs and we find systematic associations between the incidence of reporting discrepancies and observable person and job characteristics that are consistent with this hypothesis the paper discusses the implications of the reported findings for both micro and macro labor market analysis

an analysis of compensation in the u s venture capital partnership abstract venture capital limited partnerships are an attractive arena to study cross sectional and time series variations in compensation schemes we empirically examine 419 partnerships the compensation of new and smaller funds displays considerably less sensitivity to performance and less variation than that of other funds the fixed base component of compensation is higher for younger and smaller firms we observe no relation between incentive compensation and performance our evidence is consistent with a learning model in which the pay of new venture capitalists is less sensitive to performance because reputational concerns induce them to work hard

religious schools social values and economic attitudes evidence from bangladesh this paper uses new data on female graduates of registered secondary secular schools and madrasas from rural bangladesh and tests whether there exist attitudinal gaps by school type and what teacher specific factors explain these gaps even after controlling for a rich set of individual family and school traits we find that madrasa graduates differ on attitudes associated with issues such as working mothers desired fertility and higher education for girls when compared to their secular schooled peers on the other hand madrasa education is associated with attitudes that are still conducive to democracy we also find that exposure to female and younger teacher is associated with more favorable attitudes among graduates

a theoretical analysis of optimal financing strategies for different types of capital constrained entrepreneurs in this paper we compare two alternative financing strategies that capital constrained entrepreneurs can adopt they can either wait until they raised enough money to complete their project the more conservative strategy or use limited resources to achieve some intermediate milestone before contacting large outside investors such as venture capitalists the more adventurous strategy we examine how the choice of financing strategy is affected by entrepreneurial types life style serial and pure profit maximizing entrepreneur we show that specific entrepreneurial characteristics may ultimately affect the shape of firms as they may pursue different strategies to achieve similar goals the paper generates a number of empirical predictions on security design the interplay between angel and venture capital finance and the professionalization of the venture capital market c 2006 elsevier inc all rights reserved