A Behavioral Finance Approach to Decision Making in Entrepreneurial Finance [chapter]

Rassoul Yazdipour
2010 Advances in Entrepreneurial Finance  
Three central decisions in entrepreneurship and entrepreneurial financeentry/seed funding, financing/investment, and growth/exit -are discussed and case is made for applying the behavioral finance theories and concepts to better understand the involved decision processes, and consequently, to help improve the decisionmaking process for both entrepreneurs and venture capitalists. The behavioral finance approach is important because the traditional finance has remained silent on the first issue,
more » ... n the first issue, and the Agency Theory (financial contracting), which is effectively the only theory that is applicable to issues in entrepreneurial finance, has produced mixed empirical results.
doi:10.1007/978-1-4419-7527-0_2 fatcat:ypc3mumvpffolejckgqbivvlim