Abstract
Abstract Venture capital exit vehicles enable, to different degrees, mitigation of informational asymmetries and agency costs between the entrepreneurial venture and the new owners of the firm. Different exit vehicles also affect the amount of new capital for the entrepreneurial firm. Based on these factors, we conjecture the efficient pattern of exits depending on the quality of the entrepreneurial venture, the nature of its assets, and the duration of venture capital investment. We empirically assess the significance of these factors using a multinomial logit model. Our comparative results between Canada and the U.S. provide insight into the impact of different institutional and legal constraints, and suggest such constraints have distorted the efficient pattern of exits in Canada. Contents I NTRODUCTION ……………………………………………………………………………………………..3 I. E XIT V EHICLES ………………………………………………………………………………………...8 II. A G ENERAL T HEORY OF V ENTURE C APITAL E XITS ……………………………………………………10 III. E
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