Do Venture Capitalists Give Founders Their Walking Papers?
Journal
Journal of Corporate Finance
Type
journal article
Date Issued
2009
Author(s)
Abstract
© 2009 Elsevier B.V. All rights reserved. We investigate the impact of venture capitalists on the turnover of executives within a sample of nearly 46,500 German high-tech start-up companies founded between 1995 and 2004. We confirm that the presence of VCs increases the chances that the company will change the structure of its initial executive team. For the purposes of our analysis, we distinguish between different types of changes (somebody is replaced, the team is enlarged, the team shrinks). Additionally, we take a closer look at the subsample of venture-backed companies. We find that a small distance between the VCs and the companies they finance, as well as a larger total stake in the company owned by the VCs, goes hand-in-hand with an increased probability of changes in the initial executive teams.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
SOF - System-wide Risk in the Financial System
Refereed
Yes
Volume
15
Start page
613
End page
625
Pages
12
Subject(s)
Division(s)
Eprints ID
259434
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Name
1-s2.0-S0929119909000480-main.pdf
Size
239.82 KB
Format
Adobe PDF
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