Synergizing Ventures

62 Pages Posted: 17 Sep 2019 Last revised: 19 Oct 2020

See all articles by Ufuk Akcigit

Ufuk Akcigit

University of Chicago - Department of Economics; National Bureau of Economic Research (NBER); Center for Economic and Policy Research (CEPR)

Emin Dinlersoz

Center for Economic Studies - US Census Bureau

Jeremy Greenwood

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Veronika Penciakova

Federal Reserve Banks - Federal Reserve Bank of Atlanta; Federal Reserve Bank of Atlanta

Multiple version iconThere are 6 versions of this paper

Date Written: August 14, 2019

Abstract

Venture capital (VC) and growth are examined both empirically and theoretically. Empirically, VC-backed startups have higher early growth rates and initial patent quality than non-VC-backed ones. VC-backing increases a startup’s likelihood of reaching the right tails of the firm size and innovation distributions. Furthermore, outcomes are better for startups matched with more experienced venture capitalists. An endogenous growth model, where venture capitalists provide both expertise and financing for business startups, is constructed to match these facts. The presence of venture capital, the degree of assortative matching between startups and financiers, and the taxation of VC-backed startups matter significantly for growth.

Keywords: venture capital, assortative matching, endogenous growth, IPO, management, mergers and acquisitions, research and development, startups, synergies, taxation, patents

Suggested Citation

Akcigit, Ufuk and Dinlersoz, Emin and Greenwood, Jeremy and Penciakova, Veronika and Penciakova, Veronika, Synergizing Ventures (August 14, 2019). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2019-115, Available at SSRN: https://ssrn.com/abstract=3454585 or http://dx.doi.org/10.2139/ssrn.3454585

Ufuk Akcigit (Contact Author)

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National Bureau of Economic Research (NBER) ( email )

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Center for Economic and Policy Research (CEPR) ( email )

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Emin Dinlersoz

Center for Economic Studies - US Census Bureau ( email )

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Jeremy Greenwood

University of Pennsylvania - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Veronika Penciakova

Federal Reserve Bank of Atlanta ( email )

Federal Reserve Banks - Federal Reserve Bank of Atlanta ( email )

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Atlanta, GA 30309-4470
United States

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