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Synergizing Ventures

Ufuk Akcigit (), Emin Dinlersoz (), Jeremy Greenwood and Veronika Penciakova

No 2019-17, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC backing increases a startup's likelihood of reaching the right tails of the firm size and innovation distributions. Furthermore, outcomes are better for startups matched with more experienced venture capitalists. An endogenous growth model, where venture capitalists provide both expertise and financing for business startups, is constructed to match these facts. The presence of venture capital, the degree of assortative matching between startups and financiers, and the taxation of VC-backed startups matter significantly for growth.

Keywords: venture capital; assortative matching; endogenous growth; IPO; management; mergers and acquisitions; research and development; startups; synergies; taxation; patents (search for similar items in EconPapers)
JEL-codes: E13 E22 G24 L26 O16 O31 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cfn, nep-dge, nep-ent, nep-fdg, nep-fmk, nep-ino, nep-mac and nep-sbm
Date: 2019-09-01
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Working Paper: Synergizing Ventures (2019) Downloads
Working Paper: Synergizing Ventures (2019) Downloads
Working Paper: Synergizing Ventures (2019) Downloads
Working Paper: Synergizing Ventures (2019) Downloads
Working Paper: Synergizing Ventures (2019) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedawp:2019-17

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DOI: 10.29338/wp2019-17

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