WEFI

John M. Barrios (Washington University in St. Louis)

Title: “Rugged Entrepreneurs: The Geographic and Cultural Contours of New Business Formation” How do geographic and historical-cultural factors shape new business formation? Using novel data on new business registrations, we document that 75% of the variation in new business formation is explained by time-invariant county-level factors and examine the extent to which such variation is …

Wei Jiang (Columbia University)

Title: “Surviving the FinTech Disruption” This paper studies how demand for labor reacts to financial technology (fintech) shocks based on comprehensive databases of fintech patents and firm job postings in the U.S. during the past decade. We first develop a measure of fintech exposure at the occupation level by intersecting the textual information in job …

Camille Hebert (University of Toronto)

Title: “Learning from Errors in Entrepreneurship” This paper studies how entrepreneurs form new beliefs after making forecast errors. I use survey-based micro data that are representative of the population of French entrepreneurs, and I find that 21% of entrepreneurs make optimistic errors, while 36% make pessimistic errors, suggesting that a minority of entrepreneurs are initially …

Jay Ritter (University of Florida)

Title: “SPACs” Going public by merging with a Special Purpose Acquisition Company (SPAC) is much more expensive than conducting a traditional IPO. We rationalize why some companies merge with a SPAC by listing the potential benefits. We analyze the agency problems that certain SPAC features address. SPAC IPO investors and deal sponsors have earned remarkably …

Yulia Zhestkova (University of Chicago)

Title: “Fencing Off Silicon Valley” The treatment of foreign investors is a contentious topic in U.S. entrepreneurship policy. We model a setting where foreign corporate investments in Silicon Valley may allow U.S. entrepreneurs to pursue technologies that they could not otherwise, but may also lead to knowledge spillovers. We show that despite the benefits from …

Jessica Jeffers (University of Chicago)

Title: “Risk and Return of Impact Investing Funds” We provide the first analysis of the risk exposure and risk-adjusted performance of impact investing funds, private market funds with dual financial and social goals. We introduce a dataset of impact fund cash flows and exploit distortions in VC performance measures to characterize risk profiles. Impact funds …

Will Gornall (University of British Columbia)

Title: “A Valuation Model of Venture Capital-Backed Companies with Multiple Financing Rounds” This paper develops the first option pricing model of venture capital-backed companies and their security values that incorporates the dilutive future financing rounds prevalent in the industry. Applying our model to 19,000 companies raising 37,000 rounds shows that preferred contractual features make the …

Laura Lindsey (Arizona State University)

Title: “Mistake-based Discrimination in Early-stage Finance” Motivated by new stylized facts from Form D financings, we develop a simple framework in which security choice in early firm financing depends on the entrepreneurial talent contri- bution to firm value relative to capital, which investors may perceive with bias. Observed outcomes are not subject to such bias. …