earticle

영어

One of the most important issues for startup companies is to secure financing. Indeed, it is essential for startups to signal their projects’ profitability to potential investors. We develop a model of single-stage startup financing with signaling under ambiguity. Nature determines the ability of a technology entrepreneur (startup), who strategically chooses a costly patent level as a signal to inform his ability to potential investors. Since the project taken by a startup may involve highly innovative technology and may not be well known to agents, they would face ambiguity about project value. To examine ambiguity effects on startup financing, we provide three different financing models in view of the degree of ambiguity: (1) no ambiguity; (2) only investors face ambiguity; (3) all agents face ambiguity. In each model, we derive perfect Bayesian equilibria and refine them into a unique equilibrium by imposing Intuitive Criterion of Cho and Kreps (1987) or its extension. We analyze the refined equilibria in perspectives of agents’ equity shares, equilibrium patent levels, and his expected profit.