Board Dynamics over the Startup Life Cycle

Michael Ewens and Nadya Malenko

No t96yq, SocArXiv from Center for Open Science

Abstract: Venture capital (VC) backed firms face neither the governance requirements nor a major separation of ownership and control of their public peers. These differences suggest that independent directors could play a unique role on private firm boards. This paper explores the dynamics of VC-backed startup boards using new data on board member entry, exit, and individual director characteristics. We document several new facts about board size, the allocation of control, and composition dynamics. At formation, a typical board has four members and is entrepreneur-controlled. Independent directors are found on the median board after the second financing event, when control over the board becomes shared, with independent directors holding the tie-breaking vote. These patterns are consistent with independent directors playing both a mediating and advising role over the startup lifecycle, and thus representing another potential source of value-add to entrepreneurial firm performance.

Date: 2020-02-16
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-ent and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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https://osf.io/download/5e4b0cedb8c2e5000f4c4d48/

Related works:
Working Paper: Board dynamics over the startup life cycle (2022)
Working Paper: Board Dynamics over the Startup Life Cycle (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:t96yq

DOI: 10.31219/osf.io/t96yq

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