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Venture Capitalists on Boards of Mature Public Firms

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  • Ugur Celikyurt
  • Merih Sevilir
  • Anil Shivdasani

Abstract

Venture capitalists (VCs) often serve on the board of mature public firms long after their initial public offering (IPO), even for companies that were not VC-backed at the IPO. Board appointments of VC directors are followed by increases in research and development intensity, innovation output, and greater deal activity with other VC-backed firms. VC director appointments are associated with positive announcement returns and are followed by an improvement in operating performance. Firms experience higher announcement returns from acquisitions of VC-backed targets following the appointment of a VC director to the board. Hence, in addition to providing finance, monitoring and advice for small private firms, VCs play a significant role in mature public firms and have a broader influence in promoting innovation than has been established in the literature. The Author 2012. Published by Oxford University Press on behalf of The Society for Financial Studies. All rights reserved. For Permissions, please e-mail: journals.permissions@oup.com., Oxford University Press.

Suggested Citation

  • Ugur Celikyurt & Merih Sevilir & Anil Shivdasani, 2014. "Venture Capitalists on Boards of Mature Public Firms," The Review of Financial Studies, Society for Financial Studies, vol. 27(1), pages 56-101, January.
    • Handle: RePEc:oup:rfinst:v:27:y:2014:i:1:p:56-101
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    File URL: http://hdl.handle.net/10.1093/rfs/hhs096
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