The Two-Stage Model of Entrepreneurs Financing Based on the Entry/Exit Decision

Table 1

The variables and symbols.

Symbol	Specification
	The effort of at the -stage, , =1,2
	The effort cost of at the stage , , =1,2
,	The expected income of EN and AN in the first stage
, ,	The expected income of EN, AN, and VC at the second stage
	The financing amount of AN at the first stage
	The financing amount of VC at the second stage
	Discount factor of income of project
	The project residual at the first stage
	The project residual at the second stage with the participation of AN
	The residual of project at the second stage without the participation of AN
	In the second stage, VC transfers the shares to the EN, when AN can participate
	In the second stage, VC transfers the shares to the EN, when AN does not participate
	In the second stage, VC transfers the shares to the AN, when AN can participate
	In the second stage, VC transfers the shares to the AN, when AN does not participate
	In the second stage, a share of AN from the rest of the income, when AN can participate
	In the second stage, a share of AN from the rest of the income, when AN does not participate
	In the first stage, AN transfers the shares to the EN
	In the second stage, VC’s bond yields, when AN can participate
	In the second stage, VC’s bond yields, when AN does not participate
	In the first stage, AN’s bond yields, when AN can participate
	In the first stage, AN’s bond yields, when AN does not participate
	Risk free interest rate of capital
	Risk free interest rate of capital