Strategic Alliances and Corporate Governance in Newly Public Firms: Evidence from Venture Backed IPOs

59 Pages Posted: 16 Mar 2010

See all articles by Vladimir I. Ivanov

Vladimir I. Ivanov

US Securities & Exchange Commission

Ronald W. Masulis

University of New South Wales, Sydney; European Corporate Governance Institute (ECGI); Financial Research Network (FIRN); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER)

Date Written: March 15, 2010

Abstract

We investigate the corporate governance of venture capital (VC) backed IPOs that enter into strategic alliances. Startups can have alliances with outside strategic partners and with parents of corporate VCs (CVCs), who primarily invest in startups for strategic reasons. Both CVCs and outside strategic alliance partners can influence an IPO firm’s corporate governance. We find that firms with strategic alliances have greater independent director representation, more staggered boards and forced CEO turnovers and smaller percentage of new shares and secondary share sales. Comparing the governance of startups with strategically oriented CVCs backing to those with outside strategic alliance partners shows stronger effects in firms backed by CVCs.

Keywords: Strategic alliances, corporate governance, venture capital, IPOs

JEL Classification: G30, G34, G39

Suggested Citation

Ivanov, Vladimir and Masulis, Ronald W., Strategic Alliances and Corporate Governance in Newly Public Firms: Evidence from Venture Backed IPOs (March 15, 2010). Available at SSRN: https://ssrn.com/abstract=1572110 or http://dx.doi.org/10.2139/ssrn.1572110

Vladimir Ivanov (Contact Author)

US Securities & Exchange Commission ( email )

Washington, DC
United States
202-551-5307 (Phone)

Ronald W. Masulis

University of New South Wales, Sydney ( email )

UNSW Business School
High St
Sydney, NSW 2052
Australia
612-9385-5860 (Phone)
612-9385-6347 (Fax)

European Corporate Governance Institute (ECGI) ( email )

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Belgium

Financial Research Network (FIRN)

C/- University of Queensland Business School
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Queensland
Australia

HOME PAGE: http://www.firn.org.au

National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER) ( email )

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Singapore, 117592
Singapore

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