Yael V. Hochberg

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Many financial markets are characterized by strong relationships and networks, rather than arm’s-length, spot-market transactions. We examine the performance consequences of this organizational choice in the context of relationships established when VCs syndicate portfolio company investments, using a comprehensive sample of U.S. based VCs over the period(More)
In capital markets, top-tier investors may have better abilities to monitor and manage their investments. In addition, there may be sorting in these markets, with top-tier investors investing in the best deals, second-tier investors investing in the second-best deals, and so forth. To separate and quantify these two effects, a structural model of the market(More)
We examine whether networks among incumbent venture capital firms help restrict entry into local VC markets in the U.S., thus improving VCs’ bargaining power over entrepreneurs. We show that VC markets with more extensive networking among the incumbent players experience less entry. The effect is sizeable economically and robust to endogeneity concerns.(More)
Institutional investors exhibit substantial home-state bias in private equity. This effect is particularly pronounced for public pension funds, where overweighting amounts to 9.7% of aggregate private-equity investments and 16.2% for the average limited partner. Public pension funds‘ in-state investments underperform by 2-4 percentage points, achieving(More)
This paper examines the effects of venture capital backing on the corporate governance of the firm following the IPO. I conduct three independent sets of tests examining effectively how governance and monitoring might differ for ventureand non-venture-backed firms. First, I find that venture-backed firms have lower earnings management, as measured by the(More)
This paper examines the effect of trust in a micro-economic environment, where trust is clearly exogenous. Using a hand-collected data on European venture capital, we show that the Eurobarometer measure of trust among nations significantly affects investment decisions. This holds even after controlling for investor and company fixed effects, geographic(More)
This paper argues that a large component of success in entrepreneurship and venture capital can be attributed to skill. We show that entrepreneurs with a track record of success are more likely to succeed than first time entrepreneurs and those who have previously failed. Funding by more experienced venture capital firms enhances the chance of success, but(More)
Many financial markets are characterized by strong relationships and networks, rather than arm’s-length, spot-market transactions. We examine the performance consequences of this organizational choice in the context of relationships established when VCs syndicate portfolio company investments, using a comprehensive sample of U.S. based VCs over the period(More)
  • Florencio Lopez-de-Silanes, Ludovic Phalippou, +27 authors Jason Zein
  • 2012
We examine the determinants of private equity returns using a newly constructed database of 7,500 investments worldwide over forty years. One in ten investments does not return any money, whereas one in four has an IRR above 50%. Performance does not appear scalable: investments held by private equity firms at times of a high number of other simultaneous(More)