This paper studies project financing when the entrepreneur derives reputation benefits from investor backing and learns privately about failure. Continued backing improves the market's perception of the project and gives the entrepreneur a reason to delay disclosure. The investor designs a contract to obtain failure information while controlling funding and compensation costs. I show the optimal contract features early discipline, with prompt disclosure and termination, followed by failure tolerance, with delayed disclosure. Allowing delay later weakens the market's interpretation of continued funding and reduces the cost of inducing early disclosure. The model predicts a startup hype cycle, bimodal termination times and systematic variation in failure tolerance across investors and ventures.

This paper studies financial contracting between an informed investor and an uninformed entrepreneur who exerts unobservable effort. The entrepreneur proposes a contract that finances the project and elicits information about its quality. Payments affect effort and the investor's reporting incentives. When the probability of success is log-supermodular, the constraint preventing underreporting always binds in the optimal separating contract. The entrepreneur's problem need not have an interior solution. For a CES probability of success and quadratic effort costs, I show that corner solutions arise over a broad parameter range: the investor breaks even on bad projects at either the lowest or highest feasible payment. The contract switches discontinuously with the prior. Hence, the outcomes of good and bad projects converge during economic downturns and diverge during boom periods. Rent-minimizing incentives can make the contract inefficient. I show that overconfidence reduces total surplus, while the effect of underconfidence is ambiguous.

We study price discrimination in markets where consumers search across firms and obtain discounts by incurring time costs. Consumers differ in their valuation of time relative to money, shaping both search behavior and menu choice. Under regularity conditions, firms pool consumers with low and high time costs and screen intermediate types through higher prices and shorter time requirements. When screening occurs, prices jump at its lower boundary but remain continuous at its upper boundary. Screening also lowers the top price relative to uniform pricing for the same consumer group: raising it would increase the time costs needed to preserve incentive compatibility elsewhere in the menu.