  This theoretical model contains concept, equations, and graphical results for
venture banking. A system of 27 equations describes the behavior of the
venture-bank and underwriter system allowing phase-space type graphs that show
where profits and losses occur. These results confirm and expand those obtained
from the original spreadsheet based model. An example investment in a castle at
a loss is provided to clarify concept. This model requires that all investments
are in enterprises that create new utility value. The assessed utility value
created is the new money out of which the venture bank and underwriter are
paid. The model presented chooses parameters that ensure that the venture-bank
experiences losses before the underwriter does. Parameters are: DIN Premium,
0.05; Clawback lien fraction, 0.77; Clawback bonds and equity futures discount,
1.5 x (USA 12 month LIBOR); Range of clawback bonds sold, 0 to 100%; Range of
equity futures sold 0 to 70%.
