Detractors have warned that Private Equity (PE) funds tend to over-lever their portfolio companies because of an option-like payoff, building up default risk and debt overhang. This paper argues PE-ownership leads to substantially higher levels of optimal (value-maximizing) leverage, by reducing...

In this paper, we examine the role of dividends as a corporate governance mechanism in founders' controlled firms to mitigate agency conflicts between founders and minority shareholders in the Indian context. We show that at higher level of ownership where founders possess effective control over...

This paper examines rent sharing in Private Investments in Public Equity (PIPEs) between newly public firms and private investors. The evidence suggests highly asymmetric rent sharing. Newly public firms earn a negative return of up to -15% in the first post-PIPE year, while investors benefit...

This research examines how startup founders' academic knowledge, and knowledge gained through startup founding experience, signal investors and attract investments. We further examine, for both financed and non-financed startups, whether these signals are associated with the startup's...

This paper examines how the coordination of venture capital (VC) investors in their syndicates, as measured by their geographic concentration, affects firm performance and ex ante contractual terms. Using the introduction of new airline routes between the locations of VC investors as a shock to...

In theory, uncertainty and sunk costs can influence industry dynamics through the option value and financing constraints channels. Empirical evaluation of these models in the context of industry dynamics are, however, at a nascent stage. Our empirical analysis, covering 267 U.S. manufacturing...

We assess whether a VC’s intrinsic commitment to a startup affects investment performance. We proxy for climate change commitment using the political contributions to democrats of the lead VC person on a deal. We find investments by democrats in climate-related startups have 8% higher...

This paper examines the causal effect of corporate venture capital (CVC) investors on the survival of startup companies using the competing hazard framework. Using parent firm merger and acquisition events as a shock to geographical exposure to venture arms thereof, I find that exposure to CVCs...

High neonatal mortality is one of the most salient 'facts' about firm performance in the industrial organisation literature. We model firm survival and examine the relative influence of firm, industry and macroeconomic factors on survival for new vis-à-vis incumbent firms in Australia. In...