Investment, duration, and exit strategies for corporate and independent venture capital-backed start-ups

We propose a model of investment, duration, and exit strategies for start-ups backed by venture capital (VC) funds that accounts for the high level of uncertainty, the asymmetry of information between insiders and outsiders, and the discount rate. Our analysis predicts that start-ups backed by corporate VC funds remain for a longer period of time before exiting and receive larger investment amounts than those financed by independent VC funds. Although a longer duration leads to a higher likelihood of an exit through an acquisition, a larger investment increases the probability of an IPO exit. These predictions find strong empirical support.

A study of governance practices in corporate foundations

Implementation of social investments through corporate foundations is growing and, therefore, it is important to study their governance aspects better. Governance is conceptualized as a set of control and incentive mechanisms to overcome the so-called agency conflicts, which originate from the separation of property and management in for-profit organizations, a concept also applied to nonprofit institutions. It is argued that corporate foundations have the characteristics both of companies and of civil society organizations, which distinguishes them from both types of organizations. This paper analyses a study in which a set of governance mechanisms, adapted from those identified by a literature review of corporate and nonprofit governance, was selected for study. It is an exploratory descriptive case study, which analyzed data about eight organizations collected through publications and interviews with their CEOs. The data analysis indicates that it is appropriate to distinguish the different organization types and to apply the agency theory. Research results indicate that the selected governance mechanisms may be adapted and used in corporate foundations. However, they are only partially applied in the observed cases, which suggests the need for further studies that might consolidate these practices in such organizations.

"Publish or perish!" : la fabrique du chercheur-entrepreneur

La course effrénée à la publication, « publish or perish », participe au renforcement d'une (nouvelle) norme scientifique : la compétitivité. Celle-ci s'est institutionnalisée lors de réformes néolibérales, tant au niveau des systèmes nationaux de recherche et d'enseignement que des instances européennes et internationales. En partant de ce contexte politique, nous avons problématisé la «fabrique» d'un sujet néolibéral, celle du chercheur-entrepreneur, sous l'angle des techniques de gouvernement à distance (benchmarking, systèmes de classement, grilles d'évaluation, etc.) compris comme des «techniques de soi» pouvant amener les enseignants-chercheurs à s'identifier et à agir comme des chercheurs-entrepreneurs. De cette perspective foucaldienne de la «fabrique» du chercheur-entrepreneur, nous distinguons, in fine, une double posture herméneutique possible: un «souci de soi» a-critique, d'ordre gestionnaire, confiant dans les règles méritocratiques et un «souci de soi» critique, d'ordre intellectuel, inquiet de voir s'installer la compétitivité comme norme dominante du champ scientifique.

Entrepreneur's Overconfidence, Private Benefits and the Market Performance of the Firm

Many firms around the world are managed and partially owned by entrepreneurs. These entrepreneurs hold under diversified portfolios and, therefore, bear idiosyncratic risk in addition to systematic risk. To compensate the additional risk borne, they extract private benefits. In this paper, we analyse how an entrepreneur's overconfidence affects the market performance of the firm, through the channel of private benefits. We show that two dimensions of overconfidence, namely overestimation of future cash-flows and underestimation of idiosyncratic risk (called miscalibration), have opposite effects on the private benefits extracted by the entrepreneur. As a consequence, firms managed and partially owned by overconfident entrepreneurs can deliver overperformance or underperformance, depending on the prevalence of overestimation or miscalibration of the beliefs of the entrepreneur.

Essays in banking and corporate finance

Abstract This paper presents a model of executive compensation in which the executive is risk-averse and has specific knowledge -knowledge about the optimal actions to take that is costly to transfer to the principal. The model generates predictions that are consistent with the available evidence and provides a rationale for a number of unresolved puzzles in executive compensation. Notably, we find that relative performance evaluation is optimal only if the quality of specific knowledge is low. We also show (1) why some common risk components are not filtered out of executives' pay, (2) why performance is more likely to be evaluated relative to aggregate market movements than relative to industry movements, and (3) why executives with higher perceived abilities are given stronger incentives. Finally, we demonstrate that the relation between risk and incentives may be positive or negative, depending on the quality of the executive's specific knowledge.

Kinship in entrepreneur networks: Performance effects of resource assembly in Africa

We examine the relationship between structural social capital, resource assembly, and firm performance of entrepreneurs in Africa. We posit that social capital primarily composed of kinship or family ties helps the entrepreneur to raise resources, but it does so at a cost. Using data drawn from small firms in Kampala, Uganda, we explore how shared identity among the entrepreneur's social network moderates this relationship. A large network contributed a higher quantity of resources raised, but at a higher cost when shared identity was high. We discuss the implications of these findings for the role of family ties and social capital in resource assembly, with an emphasis on developing economies.