We exploit the staggered introduction of liability waivers when investors hold stakes in conflicting business opportunities as a shock to venture capital (VC) investment and director networks. After the law changes, we find increases in within-industry VC investment and common directors serving on startup boards. Despite the potential for rent extraction, same-industry startups inside VC portfolios benefit by raising more capital, failing less, and exiting more successfully. VC directors serving on other startup boards are the primary mechanism associated with positive outcomes, consistent with common VC investment facilitating informational exchanges in VC portfolios.

Startups create jobs and power economic growth. That's an article of faith in the United States—but, as The Promise and Peril of Entrepreneurship reveals, our faith may be built on shaky ground. Economists Robert Fairlie, Zachary Kroff, Javier Miranda, and Nikolas Zolas—working with Census Bureau microdata—have developed a new data set, the Comprehensive Startup Panel, that tracks job creation and the survival of every startup in the country. In doing so, they recalibrate our understanding of how startups behave in the US economy. Specifically, their work seeks to answer three critical questions: How many jobs does each entrepreneur create? Do those jobs disappear quickly? And how long do entrepreneurial enterprises survive?

We propose a novel mechanism through which established firms contribute to the startup ecosystem: the allocation of R&D tax credits to startups via the M&A channel. We show that when established firms become eligible for R&D tax credits, they increase their R&D and M&A activity. In particular, they acquire more venture capital (VC)-backed startups, but not non-VC-backed firms. Moreover, the impact of R&D tax credits on firms’ R&D is increasing with their acquisition of VC-backed startups. The results suggest that established firms respond to R&D tax credits by acquiring startups rather than solely focusing on increasing their R&D intensity in-house. We also highlight evidence that startups do not appear to benefit from R&D tax credits directly, perhaps because they typically lack the taxable income necessary to directly benefit from the tax credits. In this context, established firms can play an intermediary role by acquiring startups and reallocating R&D tax credits, effectively relaxing the financial constraints faced by startups.

In der Volkswirtschaftslehre wird das Unternehmertum als treibende Kraft hinter dem Prozess kreativer Zerstörung betrachtet, die Innovationen in den Markt einführt, ineffiziente Betriebe verdrängt, und so den Grundstein für das Wachstum der Wirtschaft legt. Ein wesentlicher Bestandteil unternehmerischen Handelns ist die Gründung neuer Firmen (Carree & Thurik, 2003). Die Ursachen und Auswirkungen von Firmengründungen sind daher Gegenstand zahlreicher empirischer Studien (Geroski, 1995; Wagner, 2006). Begutachtet man die Bedeutung dieser Start-ups für die volkswirtschaftliche Entwicklung, so nimmt ihr Beitrag zur Schaffung und Vernichtung von Arbeitsplätzen eine zentrale Rolle ein. Die vorliegende Dissertation legt dar, dass die Relevanz von neu gegründeten Betrieben als Arbeitgeber nicht nur im Hinblick auf die Anzahl der von ihnen geschaffenen Arbeitsplätze beurteilt werden sollte, sondern auch im Lichte der Qualität dieser neuen Jobs. Sollten neue Firmen sich von etablierten Betrieben bezüglich Einstellungsmustern oder Arbeitsbedingungen unterscheiden, könnte dies schwerwiegende Auswirkungen auf die Karriere der dort angestellten Arbeitnehmer haben. Vor diesem Hintergrund liefern die vier Studien dieser Dissertation neue Erkenntnisse zu Einstellungsverhalten, Entlohnung und Beschäftigungsperspektiven in neu gegründeten Betrieben.

Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining start-ups instead of incumbent firms. Applying entropy balancing and following individuals over ten years, we find huge and long-lasting drawbacks from entering a start-up in terms of wages, yearly income, and (un)employment. These disadvantages hold for all groups of workers and types of start-ups analyzed. Although our analysis of different subsequent career paths highlights important heterogeneities, it does not reveal any strategy through which workers joining start-ups can catch up with the income of similar workers entering incumbent firms.

We investigate how VC participation affects the failure of startups. Using a unique dataset of the survival of peer-to-peer (P2P) platforms in China, we identify two types of failures, bankruptcy, and run off with investors' money. The Competing Risk Model results show that while VC participation reduces bankruptcy hazard, it has little impact on the runoff failures. The findings are robust to the use of matched subsamples that disentangle the influence of pre-investment screening by VC. Further analysis of exit routes reveals that conditional on failure, VC participation is associated with a higher chance of running for the exit.