This article shows how both technological and competitive risks affect the timing of private and initial public offerings in an emerging industry. Early private financing occurs in industries that are perceived to be risky, with high development costs and low probability of being displaced by technologically superior rivals. Early public financing occurs in industries perceived to be viable, with low development costs and low probability of displacement. Due to feedback effects between financial and product markets, the value of investors’ proprietary information is greater in private than in initial public offerings. This has implications for underpricing.

This article shows how both technological and competitive risks affect the timing of private and initial public offerings in an emerging industry. Early private financing occurs in industries that are perceived to be risky, with high development costs and low probability of being displaced by technologically superior rivals. Early public financing occurs in industries perceived to be viable, with low development costs and low probability of displacement. Due to feedback effects between financial and product markets, the value of investors' proprietary information is greater in private than in initial public offerings. This has implications for underpricing.

In this article we ask: what kind of information and how much of it should firms voluntarily disclose? Three types of disclosures are considered. One is information that complements the information available only to informed investors (to-be-processed complementary information). The second is information that is orthogonal to that which any investor can acquire and thus complements the information available to all investors (preprocessed complementary information). And the third is information that substitutes for the information of the informed investors in that it reveals to all what was previously known only by the informed (substitute information). Our main results are as follows. First, in equilibrium, all types of firms voluntarily disclose all three types of information. Second, in contrast to the existing literature, complementary information disclosure by firms strengthens investors' private incentives to acquire information. Substitute information disclosure weakens private information acquisition incentives. Third, while complementary information disclosure has an ambiguous effect on financial innovation incentives, substitute information disclosure weakens those incentives

In this article we ask: what kind of information and how much of it should firms voluntarily disclose? Three types of disclosures are considered. One is information that complements the information available only to informed investors (to-be-processed complementary information). The second is information that is orthogonal to that which any investor can acquire and thus complements the information available to all investors (preprocessed complementary information). And the third is information that substitutes for the information of the informed investors in that it reveals to all what was previously known only by the informed (substitute information). Our main results are as follows. First, in equilibrium, all types of firms voluntarily disclose all three types of information. Second, in contrast to the existing literature, complementary information disclosure by firms strengthens investors’ private incentives to acquire information. Substitute information disclosure weakens private information acquisition incentives. Third, while complementary information disclosure has an ambiguous effect on financial innovation incentives, substitute information disclosure weakens those incentives