Venture Capitalists and Employee Satisfaction

Abstract

Using one million employee reviews, we show that ownership is related to employee satisfaction, with VC-backing being the most significant effect. Employee satisfaction is abnormally high in the presence of a VC and decreases when the VC exits. Textual analysis of reviews shows that VC-backed employees enjoy the supportive culture, and Human Resource policies, but complain about their compensation and the challenging work environment. When the VC exits, the topics mentioned in the reviews and the satisfaction score become closer to that of similar companies, but some of the initial differences persist. VC presence has therefore a long-lasting impact.

Keywords: ESG, big data, IPO, crowdsourcing, venture capital, employee well-being, private equity, Structural Topic Modelling, ChatGPT G30, G34, G28, G50, I31, J21, J24, J31, J32