Professor Konstantinos Serfes, Drexel University
This study examines the effect of a competitive supply of venture capital (VC) on the exits initial public offering (IPO) or mergers and acquisitions (M&A) of startups. We develop a matching model with double-sided moral hazard and identify a novel differential effect of VC competition on the success of startups. Using VC data, we find evidence for this differential effect. For example, when the VC market becomes more competitive (Herfindahl-Hirschman Index (HHI) decreases by 10 per cent from its mean of 0.08), the absolute likelihood of success increases by three per cent for startups backed by less experienced VC firms, but it decreases by 4.5 per cent for startups backed by the most experienced VC firms.
Speaker bio
Professor Serfes is a member of faculty at the School of Economics, LeBow College of Business, Drexel University. He received his PhD from the University of Illinois at Champaign-Urbana. His primary research interests and areas of expertise are in industrial organisation, microeconomics and applied game theory.
Event timings
Date:
8 May 2019
Start Time:
12:00
End Time:
13:30