创业融资[文献翻译].doc

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1、本科毕业论文（设计）外 文 翻 译题 目 大学生创业融资渠道研究 专 业 财 务 管 理 一、外文原文原文：Entrepreneurial Financing The financing of startups entails potentially extreme adverse selection costs given the absent track record of the firms seeking capital, and given the risky nature of the industries in which many of them operate. Exacer

2、bating the problem, this scenario often involves an innovator who has extensive technical knowledge but has neither the accumulated reputation nor the bondable wealth necessary to convey this information credibly.Barry characterizes venture capital as having evolved precisely to fill this startup fi

3、nancing niche:At the level of small, risky ventures, access to capital markets is restricted. Not all entrepreneurs can self-finance their projects, and not all can find bankers or angels who will carry the shortfall. Venture capitalists offer them a source of funds that is specifically designed for

4、 use in risky settings. The venture capitalists themselves perform due diligence prior to investing, and information gleaned in that process can greatly reduce the adverse selection problem.This outlook raises several questions. Why is it assumed that banks cannot (or choose not to) perform the same

5、 level of due diligence as venture capitalists (VCs)? In what sense is venture capital “designed” for risky settings? The puzzle deepens when one notes that straight debt is typically advocated as a solution to the adverse selection problem whereas in practice VCs often hold convertible preferred eq

6、uity. Indeed, a defining characteristic of the venture capital market is that contracts are fairly high-powered in the sense that expected payoffs come disproportionately from the equity component or “upside”.These questions can be addressed by reflecting upon the costly due diligence to which Barry

7、 refers. By directly revealing the projects quality, due diligence reduces information asymmetry between entrepreneurs and the VC. By contrast, if quality were signaledthe traditional solution to the adverse selection problemcostly due diligence would be unnecessary since there would be no more info

8、rmation to convey. In otherwise, either signaling or costly due diligence can solve the adverse selection problem. The two mechanisms are substitutes; the question then becomes which is more cost-effective.The first contribution of the paper is to show that signaling can be prohibitively expensive i

9、n entrepreneurial financing markets, and so costly due diligence dominates. The “cost” of signaling is driven by the incentives of bad firms to pool. Yet, for startups, if funding is not obtained then the firm may have almost no value. With such low reservation values, bad entrepreneurs attempt to p

10、ool at nearly any cost. As the analysis shows, securities is unattractive enough to drive out bad entrepreneursand thus to serve as a credible signaltend to be unattractive to good entrepreneurs as well. Costly due diligence emerges as the preferred solution.As testament to the empirical importance

11、of due diligence costs in venture capital markets, Fried and Hans characterize the VC funding process as composed of six distinct, progressively rigorous stages of screening. This due diligence takes an average of 97 days to complete even before the first round of funding is initiated. The majority

12、of funding proposals do not successfully pass through the first screen, let alone subsequent screens, and the full process is described as “much more involved in bank loan reviews.The second contribution of the paper is to illustrate a link between costly due diligence and high-powered (or equity-li

13、ke) financial contracts. The intuition behind this link is simple. By definition, low-powered contracts are safe; i.e., expected payoffs vary little across firms. High-powered contracts magnify the differential in payoff between funding good and bad projects, and hence magnify the incentives to scre

14、en out bad projects. In effect, high-powered contracts make the VC bear the cost of choosing entrepreneurs unwisely. Therefore high-powered contracts encourage due diligence.To summarize, this model is designed to make three simple points: (1) upside sharing is to be expected given costly evaluation

15、, (2) such costly evaluations serve as a substitute traditional solutions to the adverse selection problem, and (3) traditional solutions are dominated for parameterizations of the model that correspond to venture capital markets.Following the path-breaking empirical work of Saar, a theoretical lite

16、rature on VC contract design emerged. One common feature of these papers is that they rationalize the optimality of convertible securities. A second common feature of these models is the admission of agency costs. For example, VCs and entrepreneurs may have different preferences regarding project ri

17、sk or exit strategy.In part, the literatures reliance on agency costs owes to a widespread belief in their empirical relevance. It is also presumably related to the aforementioned consensus: since debt is considered the optimal response to adverse selection, non-debt securities must imply the presen

18、ce of another market friction. On the other hand, it is clear how agency costs could lead to equity-like securities. Conflicts-of-interest over future actions are mitigated by granting both parties roughly symmetrical payoffs, which leads to upside-sharing. Of course, the omission of agency problems

19、 from the current model is not intended to suggest that they are unimportant empirically. Rather, the lesson is that agency costs are not a necessary condition for equity-like securities.Perhaps surprisingly, the theoretical results most closely related to this paper are contained in analyses of pub

20、licly traded securities. Assuming liquidity is exogenous and that prices are set by competitive market makers, Boot and Thakor show that splitting securities into an information-sensitive piece and a safer piece may either increase or decrease traders incentives to produce information. Fulghieri and

21、 Lukin study a similar environment but split the firms claims into a piece sold to outside investors and another piece that is retained, again analyzing the interaction between security design and information acquisition.Two important distinctions set my results apart from these models of public tra

22、ding. First, their models exogenously rule out signaling, so it not possible to examine whether traditional solutions to adverse selection are dominated and, if so, under what conditions. Second, it is not clear how the results of these public trading models might be extended to entrepreneurial fina

23、nce markets since the assumption that drives their resultslosses by liquidity traders with perfectly inelastic demandhas no obvious counterpart in an entrepreneurial finance setting.The economy consists of entrepreneurs with projects requiring capital investment K. The value of funded projects is 1

24、with probability , where G, B is an indicator of project quality, and 1 otherwise.Funded projects have expected value Vi = 1 + (1 ). It is assumed that K. Otherwise the model would admit riskless debt, which would eliminate the adverse selection problem.Entrepreneurs have reservation value V; that i

25、s, contracts are acceptable only if the residual claim has expected value V or higher. In a model of mature firm financing, V is most clearly interpreted as the value of assets-in-place, because this is the continuation value of the firm in the absence of new investment. Such an interpretation is va

26、lid in entrepreneurial settings as well because without attracting financing the entrepreneur owns the existing assets outright. The key difference is one of magnitude. Compared to models of mature firms, in entrepreneurial settings the value of assets-in-place is small relative to other parameters.

27、 The net present value of projects, V V K, is assumed to satisfyEVG V K 0 EVB V K. (1)Equation (1) justifies the nomenclature “good” and “bad.” The net present value of a project is positive if and only if the project is good. Finally, it is assumed that net present values satisfy(EG V K) + (1 )(EB

28、V K) 0, (2)where is the proportion of good projects in the economy. Because net present values are positive (on average), the model admits pooling equilibrium.One source of capital is an uninformed investor who conducts a mechanical credit evaluation based on observable characteristics. This investo

29、r may be thought of as a proxy for the competitive commercial banking market. Consistent with this interpretation, it will be shown that this investor takes debt in equilibrium. Briefly, the intuition is that when one is uninformed, one solves the adverse selection problem in the traditional way. As

30、 mentioned in the introduction, this solution is debt.An alternative source of capital is an investor endowed with technology that can evaluate project quality. This investor is referred to as a VC. Consistent with this identification, it will be shown that the VC takes high-powered contracts in equ

31、ilibrium. Likewise, it needs to be shown that the VC actually employs the screening technology. A priori, this usage is not obvious. In particular, if the financial contract is very generous (if it leaves the VC with a large stake), then it may be profitable to forego the costly evaluation in favor

32、of funding all projects. Such an outcome would benefit bad entrepreneurs, because they too would like to attract funding provided they can pool with good firms and thereby obtain mispriced financing. By limiting this pooling, costly due diligence effects a transfer from bad entrepreneurs to good ent

33、repreneurs, and in the process, directs real investment toward better projects.Entrepreneurs seeking venture capital finance form a (randomly ordered) queue, and the VC sequentially evaluates them. For each entrepreneur, upon paying a cost C the VC receives a signal s G, B with Prs = G | entrepreneu

34、r is bad = Prs = B | entrepreneur is good = (3)The unconditional probability of a good signal is (1 ) + (1 ), so VCs expect to evaluate 1/(1 ) + (1 ) entrepreneurs before a good one is found. The financial contract must be sufficiently generous (ex ante) as to compensate the VC for both capital cont

35、ribution K and expected evaluation costs = C/(1 ) + (1 ) incurred in the process of obtaining each good signal.This game admits three types of Bayesian Nash equilibrium. In separating equilibrium, good entrepreneurs offer a security which bad entrepreneurs find too unpleasant to mimic (choosing inst

36、ead to receive reservation utility V). Adverse selection in the queue becomes degenerate since only good firms are active. VC equilibrium serve as a second solution. In this scenario, the entrepreneurs contracts induce the investor to evaluate all firms in the queue. Finally, pooling can be thought

37、of as the case in which good entrepreneurs find both of the aforementioned solutions to adverse selection too expensive.In this paper, I limit attention to debt and equity. Earlier drafts considered arbitrary securities, with similar resulting intuition: high-powered securities promote due diligence

38、, whereas low-powered securities are more effective signaling devices. The restriction to standard securities simplifies the presentation, retains the crucial intuition, and facilitates comparison of my results with those of the existing literature.This paper argues that in entrepreneurial finance m

39、arkets, direct revelation of project quality (via the due diligence of VCs) is more cost-effective than signaling quality. This theme ties into an empirical literature showing that the due diligence process in those markets is quite extensive. Indeed, due diligence is a defining feature of the VC ma

40、rket.Several features of the model are quite strong and give the appearance that the mechanisms considered for resolving adverse selection are perfect substitutes. In a richer model, the two mechanisms could work as partial complements as well. Generally, a role exists for both entrepreneurial signa

41、ling and VC due diligence. Earlier drafts of the paper show complement may be motivated in multiple ways. For example, suppose entrepreneurs have noisy private information. Then the optimal security may involve signaling, thus eliminating entrepreneurs with bad information. But to the extent that th

42、e pool has residual uncertainty even after this self-selection, costly due diligence may still add value.Information acquisition occurs outside venture capital markets, of course. This model may shed light on the usage of unit IPOs, which are bundles of stocks and warrants often used for particularl

43、y small, risky offerings. The inclusion of warrants is puzzling from an adverse selection perspective, since the existing literature argues that securities should emphasize payoffs in bad states. The logic of this paper suggests that these securities, which emphasize good states to an extreme, motiv

44、ate investors to evaluate projects and might be used when other mechanisms of dealing with adverse selection are too expensive.Finally, the models conclusions are not tied to the assumption that good entrepreneurs choose the contract. A connection between information acquisition incentives and the s

45、hape of the security exists independently of the contracts origins. One could equivalently model a general partner in a venture capital fund raising money from limited partners, announcing what securities the fund intends to hold. The more equity-like the securities are, the stronger the general par

46、tners information acquisition incentives.Source: Chris Yung. Entrepreneurial Financing And Costly Due Diligence. The Financial Review, 2009(44),pp137-149.译文：创业融资由于缺乏融资的信用记录以及所经营公司存在的风险性，初创企业的融资通常情况下都需要很高的逆向选择成本。更糟糕的是，通常情况下，创业者拥有丰富的科技知识，但是缺乏信用积累，也没有渠道传递自己的信用。 巴里认为风险资本正好填补了创业资本的空缺： 在小规模阶段，风险资本进入资本市场是受

47、限的。想必并不是所有创业者都能依靠自有资金创业，或是依靠银行或者天使投资人填补空缺。风险资本家为他们提供了一项为在风险情境中使用而特意设计的资金。风险资本家们通过预先的严格评估以及此过程收集的信息可以大大降低逆向选择成本。 按照巴里的说法，这些问题可以通过昂贵的尽职调查反映出来。通过直接揭示项目质量，减少创业者和风险资本家之间的信息不对称。另一方面，如果质量是可以发出信喜的，那么昂贵的尽职调查就是不必要的。换而言之，尽职调查和发出信息都可以解决逆向选择问题，这两种方法是相互替代的，所以重点是谁更具有性价比。 这种看法存在几个问题。为什么假设银行不能（或者不选择）作为一个风险投资者进行严格评估？

48、为风险情境“设计”风险资本是什么意思？当人们注意到直接负债被作为逆向选择问题的解决法案而实际上风险投资家们却经常持有可转换优先股，人们会倍感疑惑。事实上，从预期收益与权益部分不成正比或者完全颠倒的意义上看，合约有强大的约束力。 像巴里指出的，这些问题可以通过高昂的严格的评估以反映解决。通过直接揭示项目的质量，可以减少企业家与投资家的信息不对称。相比之下，如果质量是能够被我们了解，那么昂贵的尽职调查是不必要的，因为我们不必了解其他。换而言之，无论是昂贵的尽职调查还是讯息都可以解决逆向选择问题。这两种机制是可以相互替代的；这样问题就变成了哪个性价比更高。 论文的第一贡献是证明在企业金融市场上消息是昂贵的，尽职调查也是如此。然而，对于新创公司，如果筹集不到资金，那么公司可能几乎没有价值。不良企业家试图在任何成本下联营。正如分析表明，证券的吸引力不足会使不良企业家转而离开，事实上，证券对于优秀的企业家也是如此没有吸引力。昂贵的尽职调查便作为首选解决方案出现。 根据以往得知的风险资本市场上的尽职调查成本的重要性，弗瑞德和汉斯里奇把创业资本融资过程描述为六个逐步严格的阶段。在第一轮资金启动前，这种尽职调查平均需要花费97天的时间方能完成。大多数的资本方案无法成