Who Creates New Firms When Local Opportunities Arise?

A growing theoretical and empirical literature shows that new business formation is key to understanding how economies respond to economic shocks. For example, new firms generate the majority of jobs created in response to fluctuations in local demand or following oil and gas discoveries.

The magnitude of the firm entry…

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Squaring Venture Capital Valuations with Reality

Historically, most successful venture capital-backed companies went public within three to eight years of their initial venture capital (VC) funding.

More recently, many successful VC-backed companies have opted to remain private for substantial periods and have grown to enormous size without a public offering. Companies such as Uber, Airbnb, and…

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Initial Coin Offering and Platform Building

In an initial coin offering (ICO), a company or an open-source project pre-sells a cryptocurrency “coin” (or token) that is redeemable for some product or service to be offered at a later date.

This structure has recently gain tremendous momentum: According to CB Insights, in 2017 more than 800 ICO…

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Fewer and Less Skilled? Human Capital, Competition, and Entrepreneurial Success in Manufacturing

Young firms are considered to be the engines of growth and dynamism in an economy and the United States has long been considered to be a nation of entrepreneurs with the best institutions for young firms to flourish. Recently however, there has been mounting anecdotal evidence and academic research to…

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Fostering Entrepreneurship: Promoting Founding or Funding?

Everybody loves Silicon Valley. Imitations can be found worldwide: Silicon Forest (Oregon), Swamp (Florida), Gorge (UK), Glen (Scotland), Fjord (Norway), Wadi (Israel), Savannah (Kenya), and many more. Policy makers, in particular, are eager to foster entrepreneurial ecosystems by promoting entrepreneurship, with the hope to foster economic growth, employment, and innovation.…

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Venturing Beyond the IPO: Financing of Newly Public Firms by Pre-IPO Investors

A wide body of literature emphasizes that venture capitalists (VCs) focus on young private companies, generally in high-tech industries.  However, we find that these investors fund companies after the IPO as well.  In a sample of private firms going public for the first time, 15% of the firms that were…

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