In many settings, including venture capital …nancing, mergers and acquisitions, and lease competition, the structure of the contracts (debt versus equity) over which …rms compete di¤ers. Furthermore, the structure of the contract a¤ects the future incentives of the …rm to engage in value-creating activities by potentially diluting e¤ort or investment incentives. We study, both theoretically and in the lab, the performance of debt and equity auctions in the presence of both private information and hidden e¤ort. We show that the revenues to sellers in debt and equity auctions differ systematically depending on the returns to entrepreneurial e¤ort. We then test these revenue rankings and other predictions of the theory using controlled laboratory experiments where we vary the returns to e¤ort. While the bidding behavior, particularly in equity auctions, di¤ers from the dominant strategy prediction of the theory, the predicted revenue rankings are borne out in the lab.