Change gears before speeding up: The roles of Chief Executive Officer human capital and venture capitalist monitoring in Chief Executive Officer change before initial public offering

2020 ◽  
Vol 41 (9) ◽  
pp. 1653-1681
Author(s):  
Salim Chahine ◽  
Yan (Anthea) Zhang
Keyword(s):  
Human Capital ◽  
Initial Public Offering ◽  
Chief Executive Officer ◽  
Chief Executive ◽  
Venture Capitalist ◽  
Public Offering

Cross-Border LBOs, Human Capital, and Proximity: Value Addition through Monitoring in Private Equity Investments

2020 ◽  
pp. 1-41
Author(s):  
Thomas J. Chemmanur ◽  
Tyler J. Hull ◽  
Karthik Krishnan
Keyword(s):  
United States ◽  
Human Capital ◽  
Initial Public Offering ◽  
Private Equity ◽  
The United States ◽  
Efficient Allocation ◽  
Value Addition ◽  
Cross Border ◽  
Target Firms ◽  
Public Offering

We show that cross-border leveraged buyout investments involving U.S. rather than non-U.S. private equity (PE) investors are more likely to have a successful exit (initial public offering or acquisition). Exogenous increases in effective proximity following the signing of “open sky agreements” between the United States and target firms’ home countries increases both the propensity of U.S. PE firms to invest in these firms and the value addition by these investors. We show that such increases in value addition by U.S. PE investors following proximity increases are at least partially due to better monitoring, facilitated by the more efficient allocation of experienced U.S. PE managers to cross-border deals.

Determinants of the exit value in European venture capital-backed technology startups

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Benedetta Montanaro ◽  
Angelo Cavallo ◽  
Giancarlo Giudici ◽  
Antonio Ghezzi
Keyword(s):  
Human Capital ◽  
Venture Capital ◽  
Initial Public Offering ◽  
New Ventures ◽  
Content Type ◽  
Investor Heterogeneity ◽  
Public Offering ◽  
The Impact ◽  
The Empirical Analysis ◽  
Technology Startups

Purpose This study aims to analyze the impact of different exit alternatives, investor presence and founders’ human capital on the exit value of European venture capital (VC)-backed high technology startups. Design/methodology/approach The empirical analysis is based on a sample of 107 European firms that obtained an exit through Merger&Acquisition (M&A) or an initial public offering (IPO) between 2010 and 2017, backed by VC investors. Findings This study provides empirical evidence on how different exit alternatives, investor heterogeneity and founders’ human capital may affect the exit value of European VC-backed startups. Exiting through an IPO and retaining a larger equity stake are positively correlated with the exit value. The presence of business angels and non-governmental VC firms is associated with larger valuations. Founders’ previous education was positively correlated with the exit value. Originality/value Exit strategies in technology startups are essential to capitalize investors’ efforts and reinvest cash into new ventures, supporting the development of entrepreneurial ecosystems and countries’ competitiveness. The results of this study provide interesting hints for policymakers and contribute to an in-depth understanding of the drivers of exit valuation for startups.

Imprinting human capital values to survive 20 years post initial public offering

2021 ◽  
Vol 2021 (1) ◽  
pp. 14162
Author(s):  
Theresa M. Welbourne ◽  
Joshua Victor White ◽  
Miranda Welbourne Eleazar
Keyword(s):  
Human Capital ◽  
Initial Public Offering ◽  
Public Offering

scholarly journals Urban Agglomeration and CEO Compensation

2016 ◽  
Vol 51 (6) ◽  
pp. 1925-1953 ◽  
Author(s):  
Bill B. Francis ◽  
Iftekhar Hasan ◽  
Kose John ◽  
Maya Waisman
Keyword(s):  
Human Capital ◽  
Educational Attainment ◽  
Chief Executive Officer ◽  
Ceo Compensation ◽  
Metropolitan Areas ◽  
Chief Executive ◽  
Urban Agglomeration ◽  
Local Network ◽  
Positive Relation

We examine the relation between the agglomeration of firms around big cities and chief executive officer (CEO) compensation. We find a positive relation among the metropolitan size of a firm’s headquarters, the total and equity portion of its CEO’s pay, and the quality of CEO educational attainment. We also find that CEOs gradually increase their human capital in major metropolitan areas and are rewarded for this upon relocation to smaller cities. Taken together, the results suggest that urban agglomeration reflects local network spillovers and faster learning of skilled individuals, for which firms are willing to pay a premium and which are therefore important factors in CEO compensation.

Human Capital and Founder Leadership at Initial Public Offering

2012 ◽  
Vol 2012 (1) ◽  
pp. 10785
Author(s):  
Jon Eckhardt ◽  
Marc T. Junkunc ◽  
Mingxiang Li
Keyword(s):  
Human Capital ◽  
Initial Public Offering ◽  
Public Offering

Firm–Specific Human Capital and Governance in IPO Firms: Addressing Agency and Resource Dependence Concerns

2009 ◽  
Vol 33 (4) ◽  
pp. 845-865 ◽  
Author(s):  
Jonathan D. Arthurs ◽  
Lowell W. Busenitz ◽  
Robert E. Hoskisson ◽  
Richard A. Johnson
Keyword(s):  
Human Capital ◽  
Initial Public Offering ◽  
Resource Dependence ◽  
Resource Dependence Theory ◽  
New Venture ◽  
Start Up ◽  
Dependence Theory ◽  
Contingent Compensation ◽  
Public Offering ◽  
Specific Human Capital

Entrepreneurs with firm–specific human capital represent both a potential source of competitive advantage and a threat to appropriate the rents that are ultimately generated by a new venture. This situation presents interesting agency and resource dependence challenges. While potential investors in these ventures will want assurances that their interests are protected, they will also want to ensure that these key entrepreneurs remain with the organization. Using agency theory and resource dependence theory, we examine the types of governance mechanisms that are implemented in firms going through an initial public offering comparing those ventures which indicate a dependence on these critical entrepreneurs versus those that do not. Our analysis reveals that ventures exhibiting dependence on key entrepreneurs are associated with higher insider and outsider ownership by the board, greater start–up experience by the board, greater use of contingent compensation, and greater use of involuntary departure agreements.

Investor Horizon and CEO Horizon Incentives

2014 ◽  
Vol 89 (4) ◽  
pp. 1299-1328 ◽  
Author(s):  
Brian Cadman ◽  
Jayanthi Sunder
Keyword(s):  
Stock Returns ◽  
Initial Public Offering ◽  
Firm Value ◽  
Chief Executive ◽  
Data Availability ◽  
Investment Horizon ◽  
Management Actions ◽  
Long Run ◽  
Short Horizon ◽  
Public Offering

ABSTRACT: We examine the relation between shareholder investment horizon and chief executive officer (CEO) horizon incentives derived from compensation contracts. We find that influential incumbent shareholders provide managers with short-horizon incentives to maximize current firm value when these shareholders plan to sell their stock. Specifically, we use the initial public offering (IPO) setting in which venture capitalists (VCs) represent short-horizon, controlling investors with strong selling incentives after the IPO. We predict and find that VCs' short-term incentives influence CEO's annual horizon incentives following the IPO. At the same time, institutional monitoring limits the influence of VCs on annual, short-horizon incentives. To preempt this disciplining by market participants, VCs grant equity prior to the IPO that correspond with their short-horizons and result in shorter portfolio horizon incentives for the CEO after the IPO. We also document a positive relation between long-run abnormal stock returns and horizon incentives, consistent with horizon incentives influencing management actions. Data Availability: All data are publicly available from the sources indicated in the paper.

Generalist versus specialist CEO and R&D commitment: evidence from an emerging market

2021 ◽  
pp. 1-17
Author(s):  
Arpita Agnihotri ◽  
Saurabh Bhattacharya
Keyword(s):  
Human Capital ◽  
Boundary Conditions ◽  
Chief Executive Officer ◽  
Emerging Market ◽  
Top Management Team ◽  
Chief Executive ◽  
Management Team ◽  
Top Management ◽  
The Impact ◽  
Educational Diversity

Abstract Leveraging the human capital specificity and the Chief Executive Officer (CEO)–top management team (TMT) interface literature, this study explores the impact of generalist versus specialist CEOs on R&D commitments by Indian firms under the boundary conditions of TMTs' functional and educational diversity. Based on a sample of 253 firms over a period of 6 years, in contrast to previous studies, our findings suggest that specialist CEOs are more likely to invest in R&D than generalist CEOs; however, when supported by functionally and educationally diverse TMT, the R&D commitment of generalist CEOs increases as well.

scholarly journals CHIEF EXECUTIVE OFFICER (CEO) POWER, CEO KELUARGA, DAN NILAI IPO PREMIUM PERUSAHAAN KELUARGA DI INDONESIA

2017 ◽  
Vol 21 (2) ◽  
pp. 219
Author(s):  
I Made Sudana ◽  
Ni Putu Nina Aristina
Keyword(s):  
Initial Public Offering ◽  
Capital Market ◽  
Family Firms ◽  
Investment Decision ◽  
Chief Executive ◽  
Ceo Power ◽  
Ceo Tenure ◽  
Public Offering ◽  
Voting Right

The development of family firms led to increase the funding requirement for expansion. Family firms can obtain funds from capital market by doing initial public offering (IPO). The aims of this research is to know the influence of CEO power using proxy of CEO voting right, CEO tenure, and CEO interlock on IPO premium, and the influence of family CEO on IPO premium. This research uses 65 samples of family firm in Indonesia during 2001-2014. The result of multiple regression showed that CEO voting right, CEO interlock, and family CEO are positive significantly affect IPO premium. This finding reveal that when investors make investment decision on IPO’s firms, they will evaluate the quality of firm’s CEO. Also, the presence of family CEO increase investor’s valuation on company shares that increase IPO premium.

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