Venture Debt Financing: Determinants of the Lending Decision

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Friday 18 October 2013  –  3:00 pm to 5:00 pm at the QUT Gardens Point Campus,  

Presented by Gaétan de Rassenfosse – University of Melbourne, Australia

We provide the first empirical evidence on the determinants of the lending decision of venture debt firms, specialized institutions that provide loans to finance growth of high-tech startups. Building on existing field interviews and case studies, we design a choice experiment of the lending decision and conduct experiments with 55 senior venture lenders. We find support for the hypothesis that backing by venture capital firms substitutes for startups’ cash flow. Furthermore, we illustrate the signaling effect of patents and their role as collateral to facilitate the lending decision.

The paper can be downloaded at the following URL:

Gaétan de Rassenfosse is a Senior Research Fellow in economics at the University of Melbourne.  He works at the Melbourne Institute of Applied Economic and Social Research (MIAESR), and he is also affiliated with the Intellectual Property Research Institute of Australia (IPRIA).  He obtained a PhD in Economics from the Université libre de Bruxelles (Solvay Brussels School of Economics & Management, ECARES) in 2010. His research covers the fields of economics and management of innovation. It aims at understanding the innovation process, all the way from the emergence of inventions to their obsolescence, and mostly takes an empirical dimension. Published papers appeared in journals such as Oxford Bulletin of Economics and Statistics, Research Policy, and Small Business Economics.

To RSVP please contact Karen Taylor