ScienceDirect - Journal of Banking & Finance : Venture capital financing, moral hazard, and learning

ScienceDirect - Journal of Banking & Finance : Venture capital financing, moral hazard, and learning: "allocation of the funds and the learning process are subject to moral hazard. The optimal contract is a time-varying share contract which provides intertemporal risk-sharing between venture capitalist and entrepreneur. The share of the entrepreneur reflects the value of a real option. The option itself is based on the control of the funds. The dynamic agency costs may be high and lead to an inefficient early stopping of the project."