Venture capital and the professionalization of start-up firms: Empirical evidence

Published

Journal Article

This paper examines the impact venture capital can have on the development of new firms. Using a hand-collected data set on Silicon Valley start-ups, we find that venture capital is related to a variety of professionalization measures, such as human resource policies, the adoption of stock option plans, and the hiring of a marketing VP. Venture-capital-backed companies are also more likely and faster to replace the founder with an outside CEO, both in situations that appear adversarial and those mutually agreed to. The evidence suggests that venture capitalists play roles over and beyond those of traditional financial intermediaries.

Full Text

Duke Authors

Cited Authors

  • Hellmann, T; Puri, M

Published Date

  • January 1, 2002

Published In

Volume / Issue

  • 57 / 1

Start / End Page

  • 169 - 197

International Standard Serial Number (ISSN)

  • 0022-1082

Digital Object Identifier (DOI)

  • 10.1111/1540-6261.00419

Citation Source

  • Scopus