Firms insiders have more information about their firms than outsiders. This chapter begins by discussing the blockchain-enabled platform introduced by NASDAQ and the IPO by Square and the role of asymmetric information in these events. It then presents the most famous asymmetric information-based theory of capital structure: the pecking-order theory according to which firms prefer to use internal funds over debt, and debt over equity. The underpricing of newly issued shares is explained. Another important idea follows: risk-averse entrepreneurs retain larger stakes of equity in their companies to signal their quality. Empirical implications of both theories are presented and a literature review is provided. The chapter ends with a discussion about whether asymmetric information is behind the recent financial crisis.