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On the Lifecycle Dynamics of Venture-Capital- and Non-Venture-Capital-Financed Firms

Manju Puri

Duke University - Fuqua School of Business; National Bureau of Economic Research (NBER); Duke Innovation & Entrepreneurship Initiative

Rebecca Zarutskie

Federal Reserve Board

April 19, 2012

Journal of Finance, Forthcoming

We use U.S. Census data over twenty-five years to understand the lifecycle dynamics of VC- and non-VC-financed firms. We find both successful and failed VC-financed firms achieve larger scale but are not more profitable at exit than matched non-VC-financed firms. Cumulative failure rates of VC-financed firms are lower, with the difference being driven largely by lower failure rates in the initial years after receiving VC. Our results are not driven by VCs disguising failures as acquisitions or by certain types of VCs. Finally, the performance difference between VC- and non-VC-financed firms narrows in the post-internet bubble years, but does not disappear.

Number of Pages in PDF File: 66

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Date posted: July 15, 2011 ; Last revised: October 29, 2014

Suggested Citation

Puri, Manju and Zarutskie, Rebecca, On the Lifecycle Dynamics of Venture-Capital- and Non-Venture-Capital-Financed Firms (April 19, 2012). Journal of Finance, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1885790

Contact Information

Manju Puri
Duke University - Fuqua School of Business ( email )
1 Towerview Drive
Box 90120
Durham, NC 27708-0120
United States
919-660-7657 (Phone)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Duke Innovation & Entrepreneurship Initiative
215 Morris St., Suite 300
Durham, NC 27701
United States

Rebecca Zarutskie (Contact Author)
Federal Reserve Board ( email )
20th Street and C Streets NW
Mailstop 97
Washington, DC 20551
United States
202-452-5292 (Phone)
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References:  28
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