Board members' influence on resource investments to start-ups and IPO outcomes: Does prior affiliation matter?

Hidenori Takahashi, Yasuhiro Yamakawa and Prem G. Mathew

Pacific-Basin Finance Journal, 2018, vol. 49, issue C, 30-42

Abstract: Using data that contains career paths of start-up board members, we examine how their prior affiliations with various types of venture capital (VC) firms promote financial and human resource investments from the affiliated VC firm. We find that the likelihood of affiliation-based resource investments such as financing and board member engagement depends on the type of VC firms (e.g., bank-affiliated, corporate). Meanwhile, we find little evidence that affiliation-based resource investments lead to lower IPO costs and better post-IPO performances (i.e., return on assets, buy-and-hold abnormal returns, and failure rate). While prior affiliation could improve the inflow of resources, it might worsen screening and monitoring activities.

Keywords: Affiliation; Venture capital (VC); Board members; Initial public offerings (IPOs) (search for similar items in EconPapers)
JEL-codes: G24 M13 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:49:y:2018:i:c:p:30-42

DOI: 10.1016/j.pacfin.2018.03.004

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