Working Papers
1. Transmission of Information from Private to Public Markets. (with John J. McConnell, Timothy E. Trombley, and M. Deniz Yavuz)
Revise and Resubmit at Journal of Financial and Quantitative Analysis
We report evidence consistent with institutional investors using industry-level information that they obtain from their investments in venture capital (VC) funds to earn excess returns in publicly-traded equities. We use court rulings regarding the Freedom of Information Act as an exogenous shock affecting the information flow between VC firms and institutional investors to show that the excess returns are explained by information received via this channel. Thus, institutional investors serve as conduits of information, making publicly-traded stock prices more efficient. In the process, institutional investors earn higher returns from their VC investments than implied by the cash flows thereby received.
Presented at Southern California Private Equity Conference (2022), Craig W. Holden Memorial Conference (2022), Purdue Alumni Early Stage VC Symposium (2022), Chicago Entrepreneurship Workshop (2022), 34th Mitsui Finance Symposium (2023)
Media coverage: Why Private Market Returns May Be Far Greater Than They Seem on Paper | Institutional Investor
2. The Effect of Syndication on Performance Manipulation in the Venture Capital Industry.
Venture capital fund performance measures are manipulable. This paper examines the effect of syndication among venture capital (VC) funds on the funds’ incentives to manipulate their performance measures. I show that the presence of new syndicate partners reduces misreporting by VC funds. About half of the reduction in manipulation is during the follow-on fundraising period. To identify that syndicate partners reduce performance misreporting I use: (i) a triple-difference approach around fundraising and (ii) availability-of-syndicate-partners as an instrument for the number of new syndicate partners. The implications of my findings are that LPs should better monitor VC funds with fewer new syndicate partners and regulators should consider the presence of peer-monitoring among VC funds before imposing disclosure requirements.
Presented at Binghamton University (2022), IIT Kanpur (2023), FWFS-GNY (2023), FMA (2024)
Media coverage: How Adding VC Investors Can Make Valuations More Accurate | Institutional Investor
Revise and Resubmit at Journal of Financial and Quantitative Analysis
We report evidence consistent with institutional investors using industry-level information that they obtain from their investments in venture capital (VC) funds to earn excess returns in publicly-traded equities. We use court rulings regarding the Freedom of Information Act as an exogenous shock affecting the information flow between VC firms and institutional investors to show that the excess returns are explained by information received via this channel. Thus, institutional investors serve as conduits of information, making publicly-traded stock prices more efficient. In the process, institutional investors earn higher returns from their VC investments than implied by the cash flows thereby received.
Presented at Southern California Private Equity Conference (2022), Craig W. Holden Memorial Conference (2022), Purdue Alumni Early Stage VC Symposium (2022), Chicago Entrepreneurship Workshop (2022), 34th Mitsui Finance Symposium (2023)
Media coverage: Why Private Market Returns May Be Far Greater Than They Seem on Paper | Institutional Investor
2. The Effect of Syndication on Performance Manipulation in the Venture Capital Industry.
Venture capital fund performance measures are manipulable. This paper examines the effect of syndication among venture capital (VC) funds on the funds’ incentives to manipulate their performance measures. I show that the presence of new syndicate partners reduces misreporting by VC funds. About half of the reduction in manipulation is during the follow-on fundraising period. To identify that syndicate partners reduce performance misreporting I use: (i) a triple-difference approach around fundraising and (ii) availability-of-syndicate-partners as an instrument for the number of new syndicate partners. The implications of my findings are that LPs should better monitor VC funds with fewer new syndicate partners and regulators should consider the presence of peer-monitoring among VC funds before imposing disclosure requirements.
Presented at Binghamton University (2022), IIT Kanpur (2023), FWFS-GNY (2023), FMA (2024)
Media coverage: How Adding VC Investors Can Make Valuations More Accurate | Institutional Investor
Work in progress
1. Silence Speaks Volumes: Unveiling the Effects of Corporate Sociopolitical Activism. (with Sameer Borwankar)
Presentations: CIST (2024), INFORMS (2024), FWFS-GNY (2024), WISE (2024)
2. The Dark Side of Venture Capital Networks. (with Umit Ozmel and Ranjay Gulati)
Presentations: CIST (2024), INFORMS (2024), FWFS-GNY (2024), WISE (2024)
2. The Dark Side of Venture Capital Networks. (with Umit Ozmel and Ranjay Gulati)
Non Peer-Reviewed Publications
1. Manager Selection in Private Equity (with M. Deniz Yavuz) In: Cumming, D., Hammer, B. (eds) The Palgrave Encyclopedia of Private Equity. Palgrave Macmillan, Cham. Forthcoming