What are Firms? Evolution from Birth to Public Companies
Steven N. Kaplan
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)
Swedish House of Finance
Berk A. Sensoy
Ohio State University - Fisher College of Business
CEPR Discussion Paper No. 5224
We study how firm characteristics evolve from early business plan, to initial public offering, to public company for 49 venture capital financed companies. The average time elapsed is almost six years. We describe the financial performance, business idea, point(s) of differentiation, non-human capital assets, growth strategy, customers, competitors, alliances, top management, ownership structure, and the board of directors. Our analysis focuses on the nature and stability of those firm attributes. Firm business lines remain remarkably stable from business plan through public company. Within those business lines, non-human capital aspects of the businesses appear more stable than human capital aspects. In the cross-section, firms with more alienable assets have substantially more human capital turnover.
Number of Pages in PDF File: 59
Keywords: Entrepreneurship, theory of the firm, venture capital
JEL Classification: D21, D23, G24working papers series
Date posted: October 24, 2005
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