Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC backing increases a startup's likelihood of reaching the right tails of the firm size and...

This paper investigates how patent applications and grants held by new ventures improve their ability to attract venture capital (VC) financing. We argue that investors are faced with considerable uncer-tainty and therefore rely on patents as signals when trying to assess the prospects of...

External finance is central for nascent entrepreneurs, people in the process of starting new ventures. We argue that nascent entrepreneurs use patents and prototypes in order to signal their ability to appropriate the returns from their innovation as well as the projectś feasibility. Our...

European nations substitute between employment protection regulations and labor market expenditures (e.g., unemployment insurance benefits) for providing worker insurance. Employment regulations more directly tax firms making frequent labor adjustments than other labor insurance mechanisms....

Using a comprehensive database of European firms, we study how private equity affects the rate of firm entry. We find that private equity investment benefits new business incorporation, especially in industries with naturally higher entry rates and R&D intensity. A two standard deviation...

This study analyzes the effects of the 2000-2001 dot-com crisis and the 2008-2009 financial crisis on venture capital syndication. Using propensity score matching analysis, we show that during the two crises, VCFs had a lower tendency to syndicate their investments, and the size of the...

If control of their firms allows entrepreneurs to derive private benefits, it also allows other controlling parties. Private benefits are especially relevant for venture capitalists, who typically get considerable control in their portfolio firms, but not for banks, which are passive loan...

Angel investors go by many definitions. By all definitions, though, angel investors act as informal venture capitalists and collectively invest at least billions of dollars in thousands of entrepreneurial projects annually. Despite their importance to small businesses and entrepreneurs, angel...

Innovativeness of a start-up is regarded as a prerequisite to acquire venture capital. However, it is neither obvious how to conceptualize nor how to measure it. Even though start-up innovativeness is of high practical relevance, no empirical research on the topic exists. This article is a first...

In the presence of asymmetric information, economic agents need to communicate their quality to investors and other parties. While much of the literature focuses exclusively on signaling, we develop a conceptual framework that extends this view with elements of the literature on certification....