CEO human capital and venture capital investment duration: Evidence from French IPOs

Sophie Pommet (pommet@gredeg.cnrs.fr) and Jean-François Sattin (jean-francois.sattin@univ-paris1.fr)
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Sophie Pommet: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur
Jean-François Sattin: PRISM Sorbonne - Pôle de recherche interdisciplinaire en sciences du management - UP1 - Université Paris 1 Panthéon-Sorbonne, UP1 - Université Paris 1 Panthéon-Sorbonne

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Abstract: The duration of the VC incubation period is an important parameter for the profitability of venture capital (VC) firms. This paper uses a new database of VC-backed initial public offerings (IPOs) that are listed on French financial markets in order to highlight the importance of chief executive officer (CEO) human capital on the duration of the VC incubation period prior to the IPO. By using a duration model (Weibull model) we find that while CEOs' previous academic, technical and managerial experiences seem not to affect the timing of an IPO, the CEOs' entrepreneurial background is strongly negatively correlated to the duration of VC investment (it increases the hazard ratio by more than 100%) and thus fosters IPO exit. We thank the two anonymous referees for helpful comments on this work. Responsibility for any errors lies solely with the authors.

Date: 2019
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-eur
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02374003v1
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Published in Economics Bulletin, 2019

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