1. Discussion of Branko Urosevic and Carsten Sprenger ‘Investment and Financing Decision of an Intrinsically Motivated Entrepreneur’ Arnoud W. A. Boot University of Amsterdam and CEPR November 19, 2011

2. Discussion Arnoud W.A. Boot Denver, January 8, 2011 2 Message Intrinsic motivation key attribute in running a business Beneficial in that it automatically motivates agents, yet possibly costly because it could lead to disagreements with financiers Could have implications for optimal financial structure and ownership structure of the firm

3. What is intrinsic motivation? Murdock (2002) – task involvement versus goal identification In empirical approach: Intrinsic motivation is ‘fulfill a personal vision’ or interest in ‘developing a product’ Extrinsic motivation ‘larger personal income’, ‘financial security to family’ Discussion Arnoud W.A. Boot Denver, January 8, 2011 3

4. 4 Understanding intrinsic motivation further Intrinsically motivated agents (could) have – Higher job satisfaction, need less (monetary) stimulus, show more initiative, … – Yet more stubborn, more difficult to control, less receptive for advice, less likely to learn from own mistakes (??), not very cooperative? Agents more likely to go for entrepreneurial activities? Need more freedom? Or… better alignment between mission of organization and agents – Besley-Ghatak, 2005 Discussion Arnoud W.A. Boot Denver, January 8, 2011

5. What is the objective of the paper? Just to understand contracting in environment with intrinsically motivated agent? Or, more interestingly, address key organizational issues: – In modern foot loose society, social fabric of organizations shows stress  need to find new mechanisms to stimulate agents to invest in bonding and organization-specific skills Or, resolve myopic bias – build more long- term perspective Discussion Arnoud W.A. Boot Denver, January 8, 2011 5

6. Focus on enterpreneurial activities Success of entrepreneur depends on [Ideas/vision × endurance] – Does intrinsic motivation affect both? – Link to debt capacity What type of innovations need what type of entrepreneur (and financing/ownership structure)? For what type of activities does disagreement effect dominate, and when effort effect? Discussion Arnoud W.A. Boot Denver, January 8, 2011 6

7. 7 Empirical approach Data: survey data of nascent entrepreneurs Intrinsic motivation is ‘fulfill a personal vision’, or interest in ‘developing a product’ Extrinsic motivation ‘larger personal income’, ‘financial security to family’ Discussion Arnoud W.A. Boot Denver, January 8, 2011