Abstract

http://ssrn.com/abstract=1966070
 
 

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They Just Fade Away: Mortality in the U.S. Venture Capital Industry


Christopher I. Rider


Georgetown University, McDonough School of Business

Anand Swaminathan


Emory University

October 13, 2011

Industrial and Corporate Change, 21(1): 151-185.

Abstract:     
Organizational mortality events are better understood than the process by which organizations cease to be. Complementing research on organizing, we theorize about disorganizing. We propose that disorganizing organizations attempt to avoid mortality by reducing audience engagement. We also propose that, typically, such behaviors only delay the inevitable because reduced engagement diminishes audience appeal which, in turn, raises mortality hazards. Analyzing life histories of 1,891 organizations that experience protracted mortality processes, we find support for our arguments. Reducing engagement increases the mortality hazard for venture capital firms by reducing the firm's appeal to co-investors, but gradual reductions attenuate the effects of reduced engagement on both mortality and appeal. We discuss implications of these findings for organizational theory, entrepreneurs, and institutional investors.

Number of Pages in PDF File: 50

Keywords: organizational theory, mortality, venture capital, entrepreneurship

JEL Classification: L20, L21, G24

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Date posted: November 29, 2011 ; Last revised: October 29, 2012

Suggested Citation

Rider, Christopher I. and Swaminathan, Anand, They Just Fade Away: Mortality in the U.S. Venture Capital Industry (October 13, 2011). Industrial and Corporate Change, 21(1): 151-185.. Available at SSRN: http://ssrn.com/abstract=1966070 or http://dx.doi.org/10.2139/ssrn.1966070

Contact Information

Christopher I. Rider (Contact Author)
Georgetown University, McDonough School of Business ( email )
3700 O Street, NW
Washington, DC 20057
United States
HOME PAGE: http://chrisrider.info/

Anand Swaminathan
Emory University ( email )
Atlanta, GA 30322
United States
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