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Archishman Chakraborty and Bilge Yilmaz
''Multi-stage financing and the winner's curse''
( 2003, Vol. 4 No.32 )
Raising cash in multiple stages can lower financing costs for an entrepreneur faced with multiple, differentially informed, strategic investors. By affecting investor incentives to participate in different rounds, the winner's curse problem can be partially alleviated. The results offer insight into the choice of the relative size of an IPO versus a SEO, and into gradual and partial privatization strategies.
JEL: D8 - Information, Knowledge, and Uncertainty: General
G3 - Corporate Finance and Governance: General
Manuscript Received : Sep 22 2003 Manuscript Accepted : Oct 17 2003

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