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Aaron Levie, one of the founders of the Internet file-sharing site Box, Inc. explained the difficulty the firm had in raising funds from investors: ...investors
Aaron Levie, one of the founders of the Internet file-sharing site Box, Inc. explained the difficulty the firm had in raising funds from investors: "...investors had a hard time investing in a company where the founders acted 40, were 19 and looked 12. They thought we'd run off to Disneyland with the funding money." Source: Monica Langley, "Rich, but Not Silicon Valley Rich for Founders of Box," Wall Street Journal, April 23, 2015. What do economists call the problem Levie encountered? O A. Moral hazard. O B. Asymmetric information. OC. Adverse selection. OD. The Theranos Syndrome. All of the following help explain why this problem might be less likely with larger established han with small startups, except O A. Larger firms have established histories that lenders can reference while startups have less available information. O B. Larger firms have a higher opportunity cost of running off with money inappropriately. O C. Large firms have a separation of ownership from control. O D. Large firms do not face a principal-agent
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