Journal ArticleDOI
Venture Capital and the Professionalization of Start-Up Firms: Empirical Evidence
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This paper examined the influence of venture capitalists on the professionalization of firms' internal organization and found that there is a "soft" facet to venture capitalists, in terms of supporting companies to build up their human resources within the organization.Abstract:
This paper examines empirical evidence on the impact that venture capitalists can have on the development path of new firms. We use a hand-collected data set on Silicon Valley start-up companies that allows us to "look inside the black box" and analyze the influence of venture capital on the professionalization of firms' internal organization. The evidence suggests that there is a "soft" facet to venture capitalists, in terms of supporting companies to build up their human resources within the organization. Venture capital is also important at the top, in that venture capital backed companies are more likely and faster to bring in outsiders as CEOs. These CEO replacements are often accompanied with the founder departing from the company, suggesting that venture capitalists also exhibit a "hard" facet in terms of exercising control. The paper examines how these various roles are interrelated, and shows how the role of venture capital varies with the state of the company.read more
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The venture capital cycle
Paul A. Gompers,Josh Lerner +1 more
TL;DR: Gompers and Lerner as discussed by the authors synthesize their path-breaking work by synthesizing their pathbreaking work into a road map for future research in the growing area of venture capital, which is based on original data sets developed through close relationships with institutional investors in VC funds and investment advisors.
Journal ArticleDOI
Financial Contracting Theory Meets the Real World: An Empirical Analysis of Venture Capital Contracts
Steven N. Kaplan,Per Strömberg +1 more
TL;DR: In this paper, the authors compare the characteristics of real world financial contracts to their counterparts in financial contracting theory by conducting a detailed study of actual contracts between venture capitalists (VCs) and entrepreneurs.
Journal ArticleDOI
Picking winners or building them? Alliance, intellectual, and human capital as selection criteria in venture financing and performance of biotechnology startups
TL;DR: In this paper, the authors examine whether VCs emphasize picking winners or building them by comparing the effects of startups' alliance, intellectual, and human capital characteristics on VCs decisions to finance them with the same characteristics on future startup performance.
Journal ArticleDOI
In Search of New Foundations
TL;DR: The authors argue that corporate finance theory, empirical research, practical applications, and policy recommendations are deeply rooted in an underlying theory of the firm, and they also argue that although the existing theories have delivered very important and useful insights, they seem to be quite ineffective in helping us cope with the new type of firms that is emerging.
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Whom You Know Matters: Venture Capital Networks and Investment Performance
TL;DR: In this paper, the authors examine the performance consequences of this organizational choice in the context of relationships established when VCs syndicate portfolio company investments and provide initial evidence on the evolution of VC networks.
References
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Journal ArticleDOI
A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity
TL;DR: In this article, a parameter covariance matrix estimator which is consistent even when the disturbances of a linear regression model are heteroskedastic is presented, which does not depend on a formal model of the structure of the heteroSkewedness.
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