{"product_id":"real-options-as-signals-insights-from-biotechnology-1973-1998-von-jay-janney","title":"Real Options as Signals: Insights from Biotechnology, 1973-1998","description":"\u003cp\u003eEntrepreneurship is a three part race:  finding an  opportunity, convincing others to invest, and then  executing the opportunity. The 2nd race is  especially challenging for knowledge intensive  firms,  because they possess valuable information  that investors do not have, but must be careful  revealing the information.  One way to do so is  through Private placements, which differ from public  equity in four key ways. First, only accredited  investors (¿smart money¿) may make the investment.  2nd they are largely illiquid for 30 days-two years.  3rd  investors may conduct a due diligence  investigation.  Finally, they can demand  covenants for their investment.Very importantly,  while the information in  a private placement is not  revealed, the fact that an accredited investor has  made an investment is revealed, and other investors  can use that information to assess the quality of  the focal firm.  For nascent firms, it benefits them  to do a private placement to a better known  investor, even at a discount, as it increases the  likelihood of their attracting future financing from  other investors.  Investor experience, and  milestones enhance this effect.\u003c\/p\u003e\u003cdiv class=\"aw-variant-hidden-subtitle-div\" id=\"aw-variant-subtitle-9783843352635\"\u003e\u003ch3\u003eHow private placements create a signal for nascent firms, post-IPO\u003c\/h3\u003e\u003c\/div\u003e","brand":"Autorenwelt Shop","offers":[{"title":"Softcover - 9783843352635","offer_id":39470043103325,"sku":"9783843352635","price":79.0,"currency_code":"EUR","in_stock":true}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/0940\/0622\/files\/b2a611f9-2fd4-495f-baa8-a1bd170fb891.jpg?v=1758087856","url":"https:\/\/shop.autorenwelt.de\/products\/real-options-as-signals-insights-from-biotechnology-1973-1998-von-jay-janney","provider":"Autorenwelt Shop","version":"1.0","type":"link"}