This paper explores the relationship between debt in the entrepreneurial capital structure and outcomes. The focus of the analysis is documenting and explaining a puzzling fact: in contrast to public firms where debt is considered a positive signal, venture capital (VC) debt is associated with poorer future firm performance. Source of debt also impacts predicts differences in firm performance.
Chakraborty, Indraneel and Ewens, Michael
"DOES SECURITY CHOICE MATTER IN VENTURE CAPITAL? THE CASE OF VENTURE DEBT (SUMMARY),"
Frontiers of Entrepreneurship Research: Vol. 32
, Article 4.
Available at: http://digitalknowledge.babson.edu/fer/vol32/iss3/4