Sky Blog
The venture capital (VC) industry has undergone a profound transformation over the past two decades with the emergence of common VC investors — that is, VC firms that hold ownership stakes in multiple startups within the same industry or product …
In the complex world of corporate governance, a novel mechanism has reemerged: board observers. Operating without the conventional voting rights of board members, these individuals have become pivotal in bridging the gap between ambitious startups and their venture capital (VC) …
Our economy is dominated by five aging tech giants – Alphabet, Amazon, Apple, Meta, and Microsoft. Each of these firms was founded more than 20 years ago: Apple and Microsoft in the 1970s, Google and Amazon in the 1990s, and …
Venture capital is widely perceived to have a gender problem. Founders seeking capital and investors themselves are overwhelmingly male, fomenting concerns about how – and how fairly – the VC sector distributes its economic gains. Indeed, the entire industry has …
Dual-class stock structures have proliferated in recent years. In 2017-2019, almost 30 percent of IPOs in the U.S. had a dual-class structure, and most of them were founder-controlled technology firms (Aggarwal, Eldar, Hochberg and Litov, 2020). Their increasing popularity has …
In today’s rapidly evolving corporate landscape, the composition of boards is not just a matter of compliance or social responsibility; it’s a strategic imperative that shapes the future of firms. Amidst growing public scrutiny and socio-economic shifts, particularly following the …
The world of startups often appears to embody the exceptionalism of modern finance, with funds swiftly flowing to the best teams and ideas wherever they may emerge. The reality, however, is much more complicated. Financing startups remains a daunting challenge …
In a new book, I discuss “investment crowdfunding” (also known as “equity crowdfunding” or “securities crowdfunding”), an inclusive new type of online venture capital market – it’s like Kickstarter, except you get a share of stock. More formally, …
Startup acquisitions by incumbent firms have been on the rise for the last few years. These acquisitions often allow larger companies to acquire new technologies or talent, while startups gain access to resources and a wider customer base. One notable …
Several developments suggest that venture capitalists (VCs) are retreating from their traditional corporate governance role of monitoring their portfolio companies. Startup founders are retaining more equity and control over their companies, and contrary to past practice, some VCs say they …
Student loans are becoming a major challenge for the United States. An estimated 43 million borrowers owe about $1.6 trillion dollars, meaning a significant fraction of U.S. households is burdened with debt that is not dischargeable in bankruptcy. The problem …
Public versus private status is a common point of differentiation among companies and can determine, for example, how they are regulated and who can invest in them. Yet many private companies increasingly resemble their public counterparts. This blurring of the …
Venture capital (VC) has become an increasingly important asset class for institutional investors such as endowments, pension funds, insurance companies, and sovereign wealth funds, as well as for wealthy individuals. A large amount of money is involved: U.S. VC-backed companies …
In the last half-century, technological progress has stagnated. The century from 1870 to 1970 brought electricity, running water, telephones, television, automobiles, and airplanes. Life expectancy at birth rose from 45 to 72. But since the early 1970s, progress has been …
Research has shown that venture capital (VC) firms substantially influence the overall economy. According to Gornall and Strebulaev (2021), among all U.S. public companies founded since 1968, VC-backed companies account for 77 percent of total market capitalization, 41 percent of …
Shareholder activists are often accused of having short investment horizons and thus pushing companies to increase their stock prices at the expense of long-term shareholder value (“short-termism”). These accusations have prompted extensive research on interventions by hedge funds. In a …
Angel investors (angels) and venture capital (VC) investors are both important sources of financing for entrepreneurial firms, but some critics, particularly VCs, often believe that angels are less able than VCs to perform due-diligence. However, an alternative view holds that …
Antitrust is in the news to an extent that it has not been for a generation. Senator Klobuchar (CALERA), senators Lee and Grassley (TEAMS Act), and, in a series of bi-partisan bills, various members of the House of Representatives all …
Until the last decade, most startups that grew to become valuable businesses chose to go public. Late-stage startups with reported valuations over $1 billion used to be so rare that venture capitalist Aileen Lee called them “unicorns.” When she coined …