Assume that the venture capitalist is risk neutral and can extract from the entrepreneur a fraction (xi)
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Assume that the venture capitalist is risk neutral and can extract from the entrepreneur a fraction \(\xi\) of the NPV of the project. Rewrite the optimization problem for the venture capitalist and the equations determining the fractional shares that should substitute for (6.2) and (6.3) after the bargain occurring in the sequence of the joint observation of the evaluation.
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