Essays in Venture Capital

Venture capital (VC) represents one of the most opaque and information-intensive segments of financial markets, characterized by high risk, high return dispersion, and severe information asymmetries. Despite its relatively small size compared to public equity markets, it plays a central role in modern economic activity, having financed many of the world's largest and most innovative firms at early stages. While conceptually rooted in one of the oldest forms of financing for high-risk entrepreneurial ventures, VC activity has expanded rapidly in recent decades, becoming a primary source of funding for high-growth entrepreneurial firms. In this thesis, I study the evolving relationship between private and public markets, the role of different VC investor types in driving venture outcomes, and the motivations underlying corporate venture capital investment activity.

The first chapter studies the emergence of private secondary markets (PSMs) as a novel liquidity venue for venture-backed firms. I show that private listing leads to a significantly lower likelihood of subsequent fundraising, pointing to a trade-off: while PSMs provide liquidity and price discovery, they also tighten financing conditions by exposing firms to continuous valuation feedback.

The second chapter studies the role of institutional venture capital (IVC) firms in startup success. Exploiting the introduction of Amazon Web Services in 2006 as a shock that reduced startup experimentation costs, I provide evidence consistent with a causal effect of IVC participation on subsequent financing and early exit outcomes, pointing to influence mechanisms intrinsic to the IVC model.

The third chapter studies corporate venture capital (CVC) activity among U.S. public firms and documents its strong persistence over time. I show that this persistence is best explained by a selection mechanism, whereby firms with stronger investment performance remain active while others exit, with commonly cited strategic motivations having limited explanatory power.