Trademarks and Entrepreneurial Firm Success: Theory and Evidence from Venture Capital Investments in Private Firms

Onur Bayar, Thomas J. Chemmanur, Harshit Rajaiya, Xuan Tian and Qianqian Yu

Entrepreneurship Theory and Practice, 2025, vol. 49, issue 3, 846-882

Abstract: We theoretically model an entrepreneur’s choice of his firm’s products to trademark, the relation between the number of trademarks and venture capital (VC) investment staging, long-run operating performance, and successful firm exit probability. We test model predictions using a large dataset of trademarks registered by VC-backed private US firms. We find that firms with a larger number of trademarks at first VC investment have a smaller number of VC financing rounds; have larger long-run sales and employment; and have greater probabilities of successful exit (initial public offering [IPO] or acquisition). Our instrumental variable analysis demonstrates that more trademarks causally enhance firm performance and reduce VC staging. JEL code: G23, G24, L26, O34

Keywords: trademarks; venture capital staging; long-run sales; long-run employment; private firm exit (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:entthe:v:49:y:2025:i:3:p:846-882

DOI: 10.1177/10422587241300438

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