Essays in Venture Capital and Entrepreneurship

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dc.contributor.advisorMegginson, William
dc.contributor.authorPark, Hyeonjoon
dc.contributor.committeeMemberFathollahi, Maryam
dc.contributor.committeeMemberFernando, Chitru
dc.contributor.committeeMemberPrice, Richard
dc.contributor.committeeMemberStanfield, Jared
dc.date.accessioned2024-04-02T14:40:31Z
dc.date.available2024-04-02T14:40:31Z
dc.date.issued2024-05-10
dc.date.manuscript2024-03-21
dc.description.abstractThis dissertation comprises two essays that investigate the realms of venture capital (VC) and entrepreneurship. In the first essay (Chapter 1), an exploration unfolds to determine whether climate risk serves as a crucial factor in the investment decisions of venture capitalists, and to assess its impact on the entrepreneurial ecosystem. The second essay (Chapter 2) delves into the repercussions of enhanced creditor rights on VC funding structure and its subsequent effects on startup performance. Chapter 1 examines the association between climate risk and green innovation within startup companies, with a specific focus on the role of VC investors in their consideration of climate risk when making investment decisions. By using the State Climate Adaptation Plans (SCAPs) as sources of exogenous variation to the perceived level of climate risk, we find that startups respond by intensifying their commitment to green innovation, while VC investors correspondingly increase their funding allocation to such environmentally focused startups. However, there is a significant heterogeneity observed among VC investors in terms of their valuation of climate risk within their investment decisions. Notably, experienced VCs do not exhibit a shift in demand towards green startups, a phenomenon that contributes to their long-term success in terms of achieving more favorable exits. Furthermore, we find that the SCAPs adversely affect brown startups in terms of attracting VC funding, while startups operating within the energy sector exhibit an increase in green innovation but fail to secure additional VC financing. These findings hold notable implications for green startups and for VC investors seeking to support green innovation in the face of evolving environmental policies. Chapter 2 aims to analyze the effects of the Uniform Fraudulent Transfer Act (UFTA) on VC investment strategies and the performance of startups. By utilizing a difference-in-differences framework, the findings indicate that the UFTA inadvertently triggers a sequence of consequences that necessitate VC investors to adjust their investment strategies, giving priority to existing portfolio companies. Consequently, owing to a scarcity of new market entrants, VC investors allocate greater funding to startups with longer durations, thereby leading these startups to rely more heavily on secured debt and experience diminished innovation outcomes subsequent to the implementation of the UFTA. Additionally, under heightened financial pressures, startups display a heightened occurrence of violations, particularly in the realm of employment offenses. Nevertheless, notwithstanding the negative externalities associated with the UFTA, startups financed by experienced VCs exhibit distinctive levels of innovation performance, ultimately facilitating their successful exit through the avenue of initial public offerings (IPOs) in the long run.en_US
dc.identifier.urihttps://hdl.handle.net/11244/340206
dc.languageen_USen_US
dc.subjectEconomics, Finance.en_US
dc.subjectBusiness Administration, Banking.en_US
dc.subjectBusiness Administration, General.en_US
dc.thesis.degreePh.D.en_US
dc.titleEssays in Venture Capital and Entrepreneurshipen_US
ou.groupMichael F. Price College of Businessen_US
shareok.nativefileaccessrestricteden_US

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