Acquisition Prices and the Measurement of Intangible Capital

Investments by firms into intangible capital play a pivotal role in a firm’s strategy and value in today’s economy. However, because the benefits to these investments can be uncertain, current financial statements under U.S. GAAP mandate that firms record these investments as operating expenses, despite the long-term benefits these investments…

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Venture Capital Contracts

A large body of academic work examines the problem of financial contracting, and frequently uses the context of an entrepreneur negotiating a financing deal with an investor. Entrepreneurial firms are key drivers of innovation and employment growth, and the efficient allocation of capital to early stage firms is crucial to…

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The Deregulation of the Private Equity Markets and the Decline in IPOs

Recent years have seen a sharp decline in the number of initial public offerings (IPOs) in the U.S.

While this decline has garnered considerable attention both in academic and policy circles and in the press, its causes remain unclear (Gao, Ritter, and Zhu (2013); Doidge, Karolyi, and Stulz (2013, 2017)).…

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Cost of Experimentation and the Evolution of Venture Capital

The emergence of the "cloud" has had a major impact on the founding and growth of entrepreneurial firms.  This new technology began with the introduction of Amazon's Web Services in 2006.  It allowed software and internet companies to rent rather than buy powerful computing resources, thus lowering the…

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