Public Policy, Start-up Entrepreneurship, and the Market for Venture Capital

Christian Keuschnigg, Søren Bo Nielsen

Research output: Working paperResearch

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In recent years, venture capital has become an important source for nancing young entrepreneurial rms. Given the apparently more innovative nature and extra value added of venture capital backed rms compared to other firms, policy makers have taken an increasing interest in an active venture capital industry. We explore how selected policy instruments determine the incentives of individuals to start up new rms and of venture capitalists to nance and advise them, and how policy thereby influences the size and nature of the industry and how it aspects aggregate welfare. We examine the impact of wage and corporate income taxes as well as capital gains taxes and start-up capital subsidies on the volume and quality of venture capital backed entrepreneurship.
Original languageEnglish
Place of PublicationFrederiksberg
PublisherDepartment of Economics. Copenhagen Business School
Number of pages40
Publication statusPublished - 2006
SeriesWorking Paper / Department of Economics. Copenhagen Business School


  • Entrepreneurship
  • Venture capital
  • Double moral hazard
  • Taxes
  • Subsidies

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