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Synergizing Ventures

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Abstract

Venture capital and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and patenting levels than non-VC-backed ones. Venture capitalists increase a startup's likelihood of reaching the right tails of the firm size and innovation distributions. Furthermore, outcomes are better for startups matched with more experienced venture capitalists. An endogenous growth model, where venture capitalists provide both expertise and financing for business startups, is constructed to match these facts. The presence of venture capital, the degree of assortative matching between startups and financiers, and the taxation of VC-backed startups matter significantly for growth.

Suggested Citation

  • Ufuk Akcigit & Emin Dinlersoz & Jeremy Greenwood & Veronika Penciakova, 2019. "Synergizing Ventures," Economie d'Avant Garde Research Reports 30, Economie d'Avant Garde.
  • Handle: RePEc:eag:rereps:30
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    More about this item

    Keywords

    assortative matching; endogenous growth; IPO; management; mergers and acquisitions; research and development; selection effects; startups; synergies; taxation; treatment effects; venture capital;

    JEL classification:

    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

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