9781118041581

Summary 625

profit share slightly above 60 percent tips the decision to high effort (the

optimal choice).

5. This is a classic manifestation of the growing separation of
   management and control in successful, growing firms. Formerly, the
   inventor was best equipped to shepherd the firm’s new product. At
   this later stage in the product life cycle, efficiency may dictate the
   institution of professional managers. The drop in the entrepreneur’s
   ownership stake is probably also a reflection of efficient financial
   diversification on his or her part.

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