Optimal Investment, Monitoring, and the Staging of Venture Capital.¶
GOMPERS, P. A. (1995). Optimal Investment, Monitoring, and the Staging of Venture Capital. Journal of Finance, 50(5), 1461-1489.
Cited by¶
3 citations across 3 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Stage Gate Process
- The partitionable commitment is the total capital a startup would need to reach profitability; instead of writing one cheque, investors slice it into pre-seed, seed, Series A, B, and C stages, each a bounded segment of company-building that produces Evidence — a working prototype, then early users, then revenue retention, then unit economics, then scalable growth.
This sourceEstablishes staged venture financing as evidence-gated escalating commitment with high inter-round attrition.
Supported in partVerified against the publisher's abstract
The 1995 abstract supports staged, monitoring-driven VC financing with an option to abandon, but not the pre-seed-to-Series-C ladder or its evidence milestones.
“Venture capitalists periodically gather information and maintain the option to discontinue funding projects with little probability of going public.”
- The partitionable commitment is the total capital a startup would need to reach profitability; instead of writing one cheque, investors slice it into pre-seed, seed, Series A, B, and C stages, each a bounded segment of company-building that produces Evidence — a working prototype, then early users, then revenue retention, then unit economics, then scalable growth.
Mechanisms¶
- Funding Tranche Review
- This is the logic of staged financing — releasing capital in milestone-conditioned increments so that each round is an option to continue, abandon, or expand.
This sourceShows that venture capital is released in stages so investors can periodically gather information before committing further funding.
- This is the logic of staged financing — releasing capital in milestone-conditioned increments so that each round is an option to continue, abandon, or expand.
- Resource Tranche
- Tranching helps when a resource is scarce, its productive use is uncertain, and dumping it all at once would overwhelm or be wasted — staging against milestones ties commitment to real absorption and preserves the option to stop, which is the core value of staged financing under uncertainty.
This sourceShows that staged venture financing responds to information uncertainty by preserving the option to discontinue weak projects.
- Tranching helps when a resource is scarce, its productive use is uncertain, and dumping it all at once would overwhelm or be wasted — staging against milestones ties commitment to real absorption and preserves the option to stop, which is the core value of staged financing under uncertainty.
Verification¶
Does it exist? Confirmed. This work's DOI resolves to a registered record, which fixes its identity. That is all it fixes.
Does it back the claim? Read against the text for 1 of 3 citations: 1 supported in part. Each verdict is shown under its citation below, with what in the work backs the sentence.
Support is checked per citation rather than per work — the same source can be cited soundly in one article and wrongly in another. Per-citation recording began recently, so a citation with no recorded check is a gap in the record rather than evidence it went unchecked.
See how references were verified.
Registry ID ref:22c24cf5d5b2 · see in the full table