Paul A. Gompers

Eugene Holman Professor of Business Administration
Chair, MBA Elective Curriculum

Unit: Finance, Entrepreneurial Management

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(617) 495-6297

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Paul Gompers, Professor of Business Administration at the Harvard Business School, specializes in research on financial issues related to start-up, high growth, and newly public companies. Professor Gompers has an appointment in both the Finance and Entrepreneurial Management areas. He received his A.B. summa cum laude in biology from Harvard College in 1987. After spending a year working as a research biochemist for Bayer Chemical AG, he attended Oxford University on a Marshall Fellowship where he received an M.Sc. in economics. He completed his Ph.D. in Business Economics at Harvard University in 1993. Professor Gompers spent two years as an Assistant Professor of Finance at the Graduate School of Business, the University of Chicago where he created a new course entitled 'Entrepreneurial Finance and Management.' His course development efforts at the Harvard Business School focuses on issues affecting entrepreneurial firms and their investors.  He also teaches in HBS Executive Education.

His research focuses on the structure, governance, and performance of private equity funds; sources of financing, incentive design, and performance of private firms; and long-run performance evaluation for newly public companies. His work on private equity funds has examined the relationship between general partners and their portfolio companies. Gompers has investigated factors affecting the structure, timing, and monitoring activities by the general partner and how these factors affect the success or failure of entrepreneurial firms. Similarly, he has examined the relationship between institutional investors and private equity fund managers. This work has examined a large collection of partnership agreements and examined issues of compensation, covenants and restrictions, as well as distribution policy and performance. Other research efforts examine the institutional and market factors that influence the performance of newly public companies. He is a Faculty Research Fellow in the National Bureau of Economic Research's Corporate Finance Program.


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Publications

Books

  1. Entrepreneurial Finance: A Casebook

    Keywords: Entrepreneurship; Finance;

    Citation:

    Gompers, Paul A., and William Sahlman. Entrepreneurial Finance: A Casebook. New York: John Wiley & Sons, 2001. View Details
  2. The Money of Invention: How Venture Capital Creates New Wealth

    Keywords: Money; Innovation and Invention; Venture Capital; Wealth;

    Citation:

    Lerner, Josh, and Paul Gompers. The Money of Invention: How Venture Capital Creates New Wealth. Boston: Harvard Business School Press, 2001. View Details
  3. The Venture Capital Cycle

    Keywords: Venture Capital;

    Citation:

    Gompers, P., and J. Lerner. The Venture Capital Cycle. Cambridge, MA: MIT Press, 1999. (Beijing: Economic Science Press, 2001 (Chinese edition). Tokyo: Springer-Verlag Tokyo, 2001 (Japanese edition). Seoul: Kukil Securities and Economics Research Institute, 2001 (Korean edition)) View Details

Journal Articles

  1. Performance Persistence in Entrepreneurship and Venture Capital

    This paper presents evidence of performance persistence in entrepreneurship. We show that entrepreneurs with a track record of success are much more likely to succeed than first-time entrepreneurs and those who have previously failed. In particular, they exhibit persistence in selecting the right industry and time to start new ventures. Entrepreneurs with demonstrated market-timing skill are also more likely to outperform industry peers in their subsequent ventures. This is consistent with the view that if suppliers and customers perceive the entrepreneur to have market-timing skill, and is therefore more likely to succeed, they will be more willing to commit resources to the firm. In this way, success breeds success and strengthens performance persistence.

    Keywords: Performance; Entrepreneurship; Venture Capital; Market Timing; Competency and Skills; Customers; Resource Allocation; Success; Business Startups;

    Citation:

    Gompers, Paul A., Josh Lerner, David Scharfstein, and Anna Kovner. "Performance Persistence in Entrepreneurship and Venture Capital." Journal of Financial Economics 96, no. 1 (April 2010). View Details
  2. Extreme Governance: An Analysis of Dual-Class Firms in the United States

    We construct a comprehensive list of dual-class firms in the United States and use this list to analyze the relationship between insider ownership and firm value. Our data have two useful features. First, since dual-class stock separates cash-flow rights from voting rights, we can separately identify the impact of each. Second, we address endogeneity concerns by using exogenous predictors of dual-class status as instruments. In single-stage regressions, we find strong evidence that firm value is increasing in insiders' cash-flow rights and decreasing in insider voting rights. In instrumental variable regressions, the point estimates are similar but the significance levels are lower.

    Keywords: Voting; Cash Flow; Stocks; Rights; Ownership Stake; Value; United States;

    Citation:

    Gompers, Paul A., Joy Ishii, and Andrew Metrick. "Extreme Governance: An Analysis of Dual-Class Firms in the United States." Review of Financial Studies 23, no. 3 (March 2010). View Details
  3. Buy Local? The Geography of Successful Venture Capital Expansion

    We document geographic concentration by both venture capital firms and venture capital-financed companies in three metropolitan areas: San Francisco, Boston, and New York. We find that venture capital firms locate in regions with high success rates of venture capital-backed investments. Geography is also significantly related to outcomes. Venture capital firms based in locales that are venture capital centers outperform, regardless of the stage of the investment. This outperformance arises from outsized performance outside of the venture capital firms' office locations, including in peripheral locations. If the goal of state and local policy makers is to encourage venture capital investment, outperformance of non-local investments suggests that policy makers might want to mitigate costs associated with established venture capitalists investing in their geographies rather than encouraging the establishment of new venture capital firms.

    Keywords: Venture Capital; Expansion; Success; Capital; Geographic Location; Business Units; Corporate Accountability; Business Offices; Goals and Objectives; Mission and Purpose; Investment Funds; Corporate Governance; Boston; New York (state, US); San Francisco;

    Citation:

    Chen, Henry, Paul A. Gompers, Anna Kovner, and Josh Lerner. "Buy Local? The Geography of Successful Venture Capital Expansion." Journal of Urban Economics 67, no. 1 (January 2010). View Details
  4. Specialization and Success: Evidence from Venture Capital

    This paper examines how organizational structure affects behavior and outcomes, studying the performance of different types of venture capital organizations. We find a strong positive relationship between the degree of specialization by individual venture capitalists at a firm and its success. When the individual investment professionals are highly specialized themselves, the marginal effect of increasing overall firm specialization is much weaker. The poorer performance by generalists appears to be due to both an inefficient allocation of funding across industries and poor selection of investments within industries. Venture capital organizations with more experience tend to outperform those with less experience.

    Keywords: Experience and Expertise; Venture Capital; Organizational Structure; Outcome or Result; Performance Effectiveness; Behavior; Financial Services Industry;

    Citation:

    Gompers, Paul A., Anna Kovner, and Josh Lerner. "Specialization and Success: Evidence from Venture Capital." Journal of Economics & Management Strategy 18, no. 3 (fall 2009): 817–844. View Details
  5. Venture Capital Investment Cycles: The Impact of Public Markets

    It is well documented that the venture capital industry is highly volatile and that much of this volatility is associated with shifting valuations and activity in public equity markets. This paper examines how changes in public market signals affected venture capital investing between 1975 and 1998. We find that venture capitalists with the most industry experience increase their investments the most when public market signals become more favorable. Their reaction to an increase is greater than the reaction of venture capital organizations with relatively little industry experience and those with considerable experience but in other industries. The increase in investment rates does not affect the success of these transactions adversely to a significant extent. These findings are consistent with the view that venture capitalists rationally respond to attractive investment opportunities signaled by public market shifts.

    Keywords: Venture Capital; Investment; Experience and Expertise; Public Equity; Volatility; Financial Services Industry;

    Citation:

    Gompers, Paul, Anna Kovner, Josh Lerner, and David Scharfstein. "Venture Capital Investment Cycles: The Impact of Public Markets." Journal of Financial Economics 87, no. 1 (January 2008): 1–23. (Earlier versions distributed as National Bureau of Economic Research Working Paper No. 11385.) View Details
  6. Large Blocks of Stock: Prevalence, Size, and Measurement

    Keywords: Stocks; Measurement and Metrics; Size;

    Citation:

    Dlugosz, Jennifer Lauren, Rudiger Fahlenbrach, Paul Gompers, and Andrew Metrick. "Large Blocks of Stock: Prevalence, Size, and Measurement." Journal of Corporate Finance 12, no. 3 (June 2006). View Details
  7. Entrepreneurial Spawning: Public Corporations and the Formation of New Ventures, 1986-1999

    Keywords: Entrepreneurship; Business Startups; Public Ownership;

    Citation:

    Gompers, Paul A., Josh Lerner, and David S. Scharfstein. "Entrepreneurial Spawning: Public Corporations and the Formation of New Ventures, 1986-1999." Journal of Finance 60, no. 2 (April 2005). (Earlier version distributed as National Bureau of Economic Research Working Paper No. 9816.) View Details
  8. The Determinants of Board Structure at the Initial Public Offering

    This paper describes board size and composition and investigates the role of venture capital in a sample of 1,116 firms' initial public offerings. First, firms backed by venture capital have fewer insider and instrumental directors and more independent outsiders. Second, we consider board composition as the outcome of a bargain between the CEO and outside shareholders. Representation of independent outsiders on the board decreases with the power of the CEO--tenure and voting control--and increases with the power of outside investors--venture capital backing and venture firm reputation. Third, within the sample of firms financed by venture capital and also consistent with a bargaining model, the probability that a founder remains as CEO is decreasing in venture firm reputation. Finally, we examine the influence of venture capital backing and board structure on firm outcomes in the 10 years after the initial public offering.

    Keywords: Governing and Advisory Boards; Venture Capital; Initial Public Offering; Managerial Roles; Power and Influence;

    Citation:

    Baker, Malcolm, and Paul Gompers. "The Determinants of Board Structure at the Initial Public Offering." Journal of Law & Economics 46, no. 2 (October 2003): 569–598. View Details
  9. The Really Long-Run Performance of Initial Public Offerings: The Pre-Nasdaq Evidence

    Keywords: Initial Public Offering; Stocks; Markets; Performance;

    Citation:

    Gompers, Paul A., and Josh Lerner. "The Really Long-Run Performance of Initial Public Offerings: The Pre-Nasdaq Evidence." Journal of Finance 58, no. 4 (August 2003). View Details
  10. The Role of Lockups in Initial Public Offerings

    In a sample of 2,794 initial public offerings (IPOs), we test three potential explanations for the existence of IPO lockups: lockups serve as (i) a signal of firm quality, (ii) a commitment device to alleviate moral hazard problems, or (iii) a mechanism for underwriters to extract additional compensation from the issuing firm. Our results support the commitment hypothesis. Insiders of firms that are associated with greater potential for moral hazard lockup their shares for a longer period of time. Insiders of firms that have experienced larger excess returns, are backed by venture capitalists, or go public with high-quality underwriters are more likely to be released from the lockup restrictions.

    Keywords: Initial Public Offering; Quality; Moral Sensibility; Compensation and Benefits; Venture Capital; Problems and Challenges; Stock Shares; Going Public;

    Citation:

    Brav, Alon, and Paul A. Gompers. "The Role of Lockups in Initial Public Offerings." Review of Financial Studies 16, no. 1 (spring 2003). View Details
  11. Corporate Governance and Equity Prices

    Keywords: Corporate Governance; Equity; Price;

    Citation:

    Gompers, Paul A., Joy L. Ishii, and Andrew Metrick. "Corporate Governance and Equity Prices." Quarterly Journal of Economics (February 2003). (Winner of Geewax, Terker & Company Prize in Investment Research presented by Rodney L. White Center for Financial Research.) View Details
  12. Who Underreacts to Cash-Flow News? Evidence from Trading between Individuals and Institutions

    Keywords: Cash Flow; Trade; Relationships;

    Citation:

    Cohen, Randolph B., Paul A. Gompers, and Tuomo Vuolteenaho. "Who Underreacts to Cash-Flow News? Evidence from Trading between Individuals and Institutions." Special Issue on Limits to Arbitrage. Journal of Financial Economics 66, nos. 2-3 (November 2002): 409–462. (Was NBER Working Paper 8793.) View Details
  13. Corporations and the Financing of Innovation

    Keywords: Financing and Loans; Innovation and Invention;

    Citation:

    Gompers, Paul A. "Corporations and the Financing of Innovation." Federal Reserve Bank of Atlanta Economic Review (Fourth Quarter 2002). View Details
  14. The Venture Capital Revolution

    Keywords: Venture Capital;

    Citation:

    Gompers, Paul A., and J. Lerner. "The Venture Capital Revolution." Journal of Economic Perspectives 15 (spring 2001). View Details
  15. Is the Abnormal Return Following Equity Issuances Anomalous?

    Keywords: Equity; Insurance;

    Citation:

    Brav, A., C. Geczy, and Paul Gompers. "Is the Abnormal Return Following Equity Issuances Anomalous?" Journal of Financial Economics 56, no. 2 (May 2000). View Details
  16. Money Chasing Deals?: The Impact of Fund Inflows on the Valuation of Private Equity Investments

    Keywords: Money; Valuation; Finance; Investment;

    Citation:

    Gompers, Paul, and Josh Lerner. "Money Chasing Deals?: The Impact of Fund Inflows on the Valuation of Private Equity Investments." Journal of Financial Economics 55, no. 2 (February 2000): 281–325. View Details
  17. Institutional Investors and Equity Prices

    Keywords: Investment; Equity; Price;

    Citation:

    Gompers, Paul A., and A. Metrick. "Institutional Investors and Equity Prices." Quarterly Journal of Economics (2000). View Details
  18. Conflict of Interest in the Issuance of Public Securities: Evidence from Venture Capital

    Keywords: Conflict of Interests; Financial Instruments; Venture Capital;

    Citation:

    Gompers, Paul, and Josh Lerner. "Conflict of Interest in the Issuance of Public Securities: Evidence from Venture Capital." Journal of Law & Economics 42, Part 1, no. 1 (April 1999): 1–28. View Details
  19. An Analysis of Compensation in the U.S. Venture Capital Partnership

    Keywords: Compensation and Benefits; Venture Capital; Partners and Partnerships; United States;

    Citation:

    Gompers, Paul, and Josh Lerner. "An Analysis of Compensation in the U.S. Venture Capital Partnership." Journal of Financial Economics 51, no. 1 (January 1999): 3–44. View Details
  20. Venture Capital Distributions: Short-Run and Long-Run Reactions

    Citation:

    Gompers, Paul, and Josh Lerner. "Venture Capital Distributions: Short-Run and Long-Run Reactions." Journal of Finance 53 (December 1998): 2161–2183. View Details
  21. Venture Capital Growing Pains: Should the Market Diet?

    Keywords: Venture Capital; Growth and Development; Markets;

    Citation:

    Gompers, Paul A. "Venture Capital Growing Pains: Should the Market Diet?" Special Issue on The Economics of Small Business Finance. Journal of Banking & Finance 22, nos. 6-8 (August 1998): 1089–1104. View Details
  22. What Drives Venture Capital Fundraising?

    Keywords: Venture Capital;

    Citation:

    Gompers, P., and J. Lerner. "What Drives Venture Capital Fundraising?" Brookings Papers on Economic Activity. Microeconomics (July 1998): 149–192. View Details
  23. 'Myth or Reality?' The Long-run Underperformance of Initial Public Offerings: Evidence from Venture- and Nonventure-capital-backed Companies

    Keywords: Initial Public Offering; Capital; Business Ventures; Venture Capital;

  24. Venture Capital and the Creation of Public Companies: Do Venture Capitalists Really Bring More than Money?

    Keywords: Venture Capital; Business Ventures; Money; Public Ownership;

    Citation:

    Gompers, Paul A., and Josh Lerner. "Venture Capital and the Creation of Public Companies: Do Venture Capitalists Really Bring More than Money?" Journal of Private Equity 1, no. 1 (Fall 1997): 15–32. View Details
  25. Risk and Reward in Private Equity Investments: The Challenge of Performance Assessment

    Keywords: Risk and Uncertainty; Motivation and Incentives; For-Profit Firms; Equity; Investment; Problems and Challenges; Performance;

    Citation:

    Gompers, Paul A., and J. Lerner. "Risk and Reward in Private Equity Investments: The Challenge of Performance Assessment." Journal of Private Equity 1 (winter 1997): 5–12. View Details
  26. The Use of Covenants: An Empirical Analysis of Venture Partnership Agreements

    Keywords: Partners and Partnerships; Theory; Agreements and Arrangements;

    Citation:

    Gompers, Paul A., and J. Lerner. "The Use of Covenants: An Empirical Analysis of Venture Partnership Agreements." Journal of Law & Economics 39, no. 2 (October 1996): 463–498. (Condensed version reprinted in Investment Policy 1 (September/October 1997): 122-130.) View Details
  27. Grandstanding in the Venture Capital Industry

    Keywords: Venture Capital; Business Ventures;

    Citation:

    Gompers, Paul A. "Grandstanding in the Venture Capital Industry." Journal of Financial Economics 42 (September, 1996): 133–156. View Details
  28. Optimal Investment, Monitoring, and the Staging of Venture Capital

    Keywords: Investment; Venture Capital;

    Citation:

    Gompers, Paul A. "Optimal Investment, Monitoring, and the Staging of Venture Capital." Journal of Finance 50 (December 1995): 1461–1489. View Details
  29. The Rise and Fall of Venture Capital

    Keywords: Venture Capital;

    Citation:

    Gompers, Paul A. "The Rise and Fall of Venture Capital." Business and Economic History 23 (winter 1994): 1–24. View Details

Book Chapters

  1. Short-Term America Revisited? Boom and Bust in the Venture Capital Industry and the Impact on Innovation

    This chapter seeks to understand the implications of the recent decline in venture activity for innovation. It argues that the situation may not be as grim as it initially appears. While there are many reasons for believing that on average venture capital has a powerful effect on innovation, the effect is far from uniform. During boom periods, the prevalence of over funding of particular sectors can lead to a sharp decline in the effectiveness of venture funds. While prolonged downturns may eventually lead to good companies going unfounded, many of the dire predictions today seem overstated.

    Keywords: Venture Capital; Innovation and Invention; Business Cycles; Financial Services Industry; United States;

    Citation:

    Lerner, Josh, and Paul A. Gompers. "Short-Term America Revisited? Boom and Bust in the Venture Capital Industry and the Impact on Innovation." In Innovation Policy and the Economy, Volume 3, edited by Adam B. Jaffe, Josh Lerner, and Scott Stern, 1–28. MIT Press, 2003. View Details
  2. Venture Capital

    Keywords: Venture Capital;

    Citation:

    Gompers, Paul, and Josh Lerner. "Venture Capital." Chap. D5 of Handbook of Modern Finance, edited by James Seward and Dennis Logue. New York: Warren, Gorham & Lamont, 2004. View Details
  3. The Role of Venture Capitalists in the Acquisition of Private Companies

    Keywords: Venture Capital; Acquisition; Private Ownership;

    Citation:

    Gompers, Paul A., and Yuhai Xuan. "The Role of Venture Capitalists in the Acquisition of Private Companies." In Research Handbook on International Banking and Governance, edited by James Barth, Chen Lin, and Clas Wihlborg. Cheltenham, UK: Edward Elgar Publishing, 2012. View Details
  4. Venture Capital and Private Equity

    Keywords: Venture Capital; Private Equity;

    Citation:

    Gompers, Paul A. "Venture Capital and Private Equity." In The Handbook of Corporate Finance: Empirical Corporate Finance, edited by Espen Eckbo. New York: Elsevier/North-Holland, 2002. View Details
  5. Venture Capital

    Keywords: Venture Capital;

    Citation:

    Gompers, Paul, and Josh Lerner. "Venture Capital." In The Technology Management Handbook, edited by Richard C. Dorf, 1–16 to 1–21. New York: CRC Press, 1999. View Details
  6. Can Corporate Venture Capital Succeed? Organizational Structure, Complementarities, and Success

    Keywords: Venture Capital; Business Ventures; Organizational Structure; Success;

    Citation:

    Gompers, Paul, and Josh Lerner. "Can Corporate Venture Capital Succeed? Organizational Structure, Complementarities, and Success." Chap. 1 in Concentrated Corporate Ownership, edited by Randall Morck, 17–50. National Bureau of Economic Research Conference Report. Chicago: University of Chicago Press, 2000. View Details
  7. Capital Formation and Investment in Venture Markets: An Assessment of Market Imperfections

    Keywords: Capital Markets; Venture Capital; Investment;

    Citation:

    Gompers, P. "Capital Formation and Investment in Venture Markets: An Assessment of Market Imperfections." In The Economic Evaluation of Technological Change, edited by Paul A. Gompers. National Institute of Standards and Technology, 1998. View Details
  8. Resource Allocation, Incentives, and Control: The Importance of Venture Capital in Financing Entrepreneurial Firms

    Keywords: Venture Capital; Resource Allocation; Motivation and Incentives; Corporate Entrepreneurship; Corporate Governance;

    Citation:

    Gompers, P. A. "Resource Allocation, Incentives, and Control: The Importance of Venture Capital in Financing Entrepreneurial Firms." In Entrepreneurship, SMEs, and the Macroeconomy, edited by Zoltan J. Acs, Bo Carlsson, and Charlie Karlsson. Cambridge University Press, 1997. View Details

Working Papers

  1. The Cost of Friendship

    We investigate how personal characteristics affect people's desire to collaborate and whether this attraction enhances or detracts from performance in venture capital. We find that venture capitalists who share the same ethnic, educational, or career background are more likely to syndicate with each other. This homophily reduces the probability of investment success, and the detrimental effect is most prominent for early-stage investments. A variety of tests show that the cost of affinity is most likely attributable to poor decision making by high-affinity syndicates after the investment is made. These results suggest that "birds-of-a-feather-flock-together" effects in collaboration can be costly.

    Keywords: Venture Capital; Partners and Partnerships; Decision Making; Identity;

    Citation:

    Gompers, Paul A., Vladimir Mukharlyamov, and Yuhai Xuan. "The Cost of Friendship." Working Paper, 2014. View Details
  2. The Cost of Friendship

    This paper explores two broad questions on collaboration between individuals. First, we investigate what personal characteristics affect people's desire to work together. Second, given the influence of these personal characteristics, we analyze whether this attraction enhances or detracts from performance. Addressing these problems in the venture capital syndication setting, we show that venture capitalists exhibit strong detrimental homophily in their co-investment decisions. We find that individual venture capitalists choose to collaborate with other venture capitalists for both ability-based characteristics (e.g., whether both individuals in a dyad obtained a degree from a top university) and affinity-based characteristics (e.g., whether individuals in a pair share the same ethnic background, attended the same school, or worked for the same employer previously). Moreover, frequent collaborators in syndication are those venture capitalists who display a high level of mutual affinity. We find that while collaborating for ability-based characteristics enhances investment performance, collaborating for affinity-based characteristics dramatically reduces the probability of investment success. A variety of tests show that the cost of affinity is not driven by selection into inferior deals; the effect is most likely attributable to poor decision-making by high-affinity syndicates post investment. Taken together, our results suggest that non-ability-based "birds-of-a-feather-flock-together" effects in collaboration can be costly.

    Keywords: Partners and Partnerships; Investment; Performance; Personal Characteristics;

    Citation:

    Gompers, Paul A., Yuhai Xuan, and Vladimir Mukharlyamov. "The Cost of Friendship." NBER Working Paper Series, No. 18141, June 2012. View Details
  3. Large Blocks of Stock: Prevalence, Size, and Measurement

    Citation:

    Dlugosz, Jennifer, Rudiger Fahlenbrach, Paul Gompers, and Andrew Metrick. "Large Blocks of Stock: Prevalence, Size, and Measurement." NBER Working Paper Series, No. w10671, August 2004. View Details
  4. Incentives vs. Control: An Analysis of U.S. Dual-Class Companies

    Citation:

    Gompers, Paul A., Joy Ishii, and Andrew Metrick. "Incentives vs. Control: An Analysis of U.S. Dual-Class Companies." NBER Working Paper Series, No. w10240, January 2004. View Details

Cases and Teaching Materials

  1. Advantage Partners: Dia Kanri (B)

    This case presents the final decision and outcomes for the (A) case.

    Keywords: private equity; LBO; roll-up; investment; condominium management; Leveraged Buyouts; Asia;

    Citation:

    Gompers, Paul A., Nobuo Sato, and Akiko Kanno. "Advantage Partners: Dia Kanri (B)." Harvard Business School Supplement 214-017, October 2013. View Details
  2. Advantage Partners: Dia Kanri (A)

    This case explores the opportunity to purchase the condominium management business of a distressed real estate developer by Advantage Partners, a leading Japanese private equity firm. The case explores investment structuring, bidding strategy, and the ability of private equity firms to add value. The role of private equity in Japan is also explored and allows students to compare the Japanese merger and acquisition market to the U.S. and Europe.

    Keywords: private equity; LBO; roll-up; investment; financing; condominium management; Leveraged Buyouts; Asia;

    Citation:

    Gompers, Paul A., Nobuo Sato, and Akiko Kanno. "Advantage Partners: Dia Kanri (A)." Harvard Business School Case 214-016, October 2013. View Details
  3. Note on LBO Capital Structure

    This note discusses the capital structure often found in LBO transactions. Although the specifics of each capital structure vary case by case, in any given year, there is a great deal of similarity in the capital structure of these buyouts. These similarities exist because debt structure is largely determined by the deal size and market conditions. The note summarizes historic trends and practices related to the debt structure in the buyout space.

    Keywords: leveraged buyouts; capital structure; Leveraged Buyouts; Capital Structure;

    Citation:

    Gompers, Paul A., Victoria Ivashina, and Joris Van Gool. "Note on LBO Capital Structure." Harvard Business School Module Note 214-039, October 2013. View Details
  4. HgCapital and the Visma Transaction (A) Courseware

    This courseware is to be used with HgCapital and the Visma Transaction (A), HBS No. 214018.

    Keywords: private equity; leveraged buyouts; management buyout; deal structuring; negotiations; Finance; Valuation; Europe;

    Citation:

    Gompers, Paul A. "HgCapital and the Visma Transaction (A) Courseware." Harvard Business School Spreadsheet Supplement 214-706, October 2013. View Details
  5. The Abraaj Group and the Acibadem Healthcare Investment (B)

    This case provides an update on the ultimate outcome of the transaction presented in The Abraaj Group and the Acibadem Healthcare Investment (A).

    Keywords: private equity; leveraged buyouts; health care; Leveraged Buyouts; Private Equity; Health Care and Treatment; Europe;

    Citation:

    Gompers, Paul A., Bora Uluduz, and Firdevs Abacioglu. "The Abraaj Group and the Acibadem Healthcare Investment (B)." Harvard Business School Supplement 214-022, September 2013. View Details
  6. The Abraaj Group and the Acibadem Healthcare Investment (A)

    This case concerns the proposed buyout of Acibadem, a leading hospital chain in Turkey. Abraaj, a MENA region private equity firm, proposes to make its first investment in Turkey. The case highlights the role of Turkish health care reform in driving the value. The case provides an opportunity to estimate the potential return on investment as well as evaluate the structuring of the transaction.

    Keywords: private equity; leveraged buyouts; healthcare; Leveraged Buyouts; Private Equity; Health Care and Treatment; Europe;

    Citation:

    Gompers, Paul A., Bora Uluduz, and Firdevs Abacioglu. "The Abraaj Group and the Acibadem Healthcare Investment (A)." Harvard Business School Case 214-021, September 2013. View Details
  7. HgCapital and the Visma Transaction (B-2): Oystein Moan

    Keywords: private equity; leveraged buyouts; management buyout; deal structuring; negotiations; Finance; Valuation; Europe;

    Citation:

    Gompers, Paul A., Karol Misztal, and Joris Van Gool. "HgCapital and the Visma Transaction (B-2): Oystein Moan." Harvard Business School Supplement 214-020, August 2013. View Details
  8. HgCapital and the Visma Transaction (B-1): Nic Humphries

    Keywords: private equity; leveraged buyouts; management buyout; deal structuring; negotiations; Finance; Valuation; Europe;

    Citation:

    Gompers, Paul A., Karol Misztal, and Joris Van Gool. "HgCapital and the Visma Transaction (B-1): Nic Humphries." Harvard Business School Supplement 214-019, August 2013. View Details
  9. HgCapital and the Visma Transaction (A)

    This case concerns the negotiations of a deal by HgCapital, a UK-based private equity firm, to buy Visma, ASA, a Norwegian software company. Visma has received an offer from Sage Group, a strategic acquirer. HgCapital must determine if it wants to bid and how to outbid a potential strategic acquirer. The case concerns bidding and negotiations strategies as well as deal structuring issues. In particular, the cross border nature of the investment, a UK firm investing in Norway, leads to a number of financing issues related to raising the debt for the LBO. The case provides an opportunity to role play both the PE fund perspective and the potential target.

    Keywords: private equity; leveraged buyouts; managment buyout; deal structuring; negotiations; Finance; Valuation; Europe;

    Citation:

    Gompers, Paul A., Karol Misztal, and Joris Van Gool. "HgCapital and the Visma Transaction (A)." Harvard Business School Case 214-018, August 2013. View Details
  10. Private Equity Exits

    This note presents statistics on private equity exits and discusses important issues relating to the most common exit routes.

    Keywords: private equity;

    Citation:

    Gompers, Paul A., and Timothy Dore. "Private Equity Exits." Harvard Business School Background Note 213-112, May 2013. (Revised May 2013.) View Details
  11. Harrah's Entertainment

    This case examines the issues of establishing and managing a capital structure for the leveraged buyout of Harrah's Entertainment.

    Keywords: private equity; leveraged buyouts; debt markets; loan contracts; covenants; casinos; gaming; Private Equity; Entertainment and Recreation Industry; United States;

    Citation:

    Gompers, Paul A., Kristin Mugford, and J. Daniel Kim. "Harrah's Entertainment." Harvard Business School Case 213-054, October 2012. View Details
  12. United Capital Partners (B)

    This case continues the discussion started in the (A) case about a proposed growth equity investor in a Russian fashion retail chain.

    Keywords: private equity; fashion; growth equity; Private Equity; Fashion Industry; Financial Services Industry; Retail Industry; Russia;

    Citation:

    Gompers, Paul A., J. Daniel Kim, and Vladimir Mukharlyamov. "United Capital Partners (B)." Harvard Business School Supplement 213-045, September 2012. View Details
  13. United Capital Partners (A)

    This case examines a proposed growth equity investor in a Russian fashion retail chain.

    Keywords: private equity; fashion; growth equity; Private Equity; Fashion Industry; Financial Services Industry; Retail Industry; Europe; Russia;

    Citation:

    Gompers, Paul A., J. Daniel Kim, and Vladimir Mukharlyamov. "United Capital Partners (A)." Harvard Business School Case 213-044, September 2012. View Details
  14. Private Equity Valuation in Emerging Markets

    This note provides an opportunity to understand how private equity investors need to adapt to emerging markets.

    Keywords: private equity; valuation; emerging markets; Finance; Private Equity; Valuation;

    Citation:

    Gompers, Paul A., Victoria Ivashina, and Timothy Dore. "Private Equity Valuation in Emerging Markets." Harvard Business School Technical Note 213-043, September 2012. View Details
  15. A Note on Valuation in Private Equity

    This note will provide an overview of valuation methodologies in private equity.

    Keywords: valuation; private equity; valuation methodologies; leveraged buyouts; Private Equity; Leveraged Buyouts;

    Citation:

    Gompers, Paul A. "A Note on Valuation in Private Equity." Harvard Business School Background Note 213-034, August 2012. (Revised July 2013.) View Details
  16. Introduction to Private Equity Finance

    This note will aid in introducing students to the Private Equity Finance course.

    Keywords: corporate finance; private equity; valuation; financing; capital structure; Finance; Private Equity;

    Citation:

    Gompers, Paul A. "Introduction to Private Equity Finance." Harvard Business School Course Overview Note 213-033, August 2012. View Details
  17. Private Equity Finance Vignettes: 2014

    This case contains four vignettes that provide an introduction to the issues covered in the course, Private Equity Finance.

    Keywords: deal sourcing; private equity; bidding; Private Equity; Bids and Bidding; North America;

    Citation:

    Gompers, Paul A., and J. Daniel Kim. "Private Equity Finance Vignettes: 2014." Harvard Business School Case 213-026, July 2012. (Revised July 2013.) View Details
  18. A Note on Franchising

    Examines the motivations for franchising. Examines the academic literature in the area and draws implications for franchising patterns. Also provides data on franchising patterns.

    Keywords: Franchise Ownership;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "A Note on Franchising." Harvard Business School Background Note 297-108, June 1997. (Revised February 2012.) View Details
  19. FirstMark Capital

    Keywords: Venture Capital;

    Citation:

    Gompers, Paul, and J. Daniel Kim. "FirstMark Capital." Harvard Business School Case 212-041, February 2012. View Details
  20. Bain Capital: Outback Steakhouse

    Bain Capital had purchased Outback Steakhouse in 2007 and despite the myriad initiatives to improve operations, the financial collapse in 2008 threatened the company's ability to meet its loan covenants. Outback's performance steadily declined throughout the year. How should Bain Capital manage the company's debt while improving Outback's performance?

    Keywords: Private Equity; Acquisition; Financial Services Industry; Food and Beverage Industry;

    Citation:

    Gompers, Paul, Kristin Mugford, and J. Daniel Kim. "Bain Capital: Outback Steakhouse." Harvard Business School Case 212-087, February 2012. (Revised November 2012.) View Details
  21. Charter Communications Bankruptcy

    Charter Communications' bankruptcy presents an opportunity for some of its creditors to convert their debt holdings into equity. A mutual fund manager must determine how to maximize his debt investment in Charter given the restructuring and decide whether to participate in an additional equity rights offering led by three private equity firms, Apollo Management, Oaktree Capital Management and Crestview Partners.

    Keywords: Insolvency and Bankruptcy; Private Equity; Borrowing and Debt; Investment; Financial Strategy; Financial Services Industry;

    Citation:

    Gompers, Paul A., and Emily Weisburst. "Charter Communications Bankruptcy." Harvard Business School Case 211-035, October 2010. (Revised January 2011.) View Details
  22. Car Wash Partners, Inc.

    Examines the investment decision of Cabot Brown and Bill Burgin, two venture capitalists, to finance Car Wash Partners (CWP). CWP intends to purchase automatic car washes around the country. Investment strategy and deal structuring are discussed.

    Keywords: Mergers and Acquisitions; Entrepreneurship; Venture Capital; Financial Strategy; Auto Industry; Service Industry;

    Citation:

    Gompers, Paul A. "Car Wash Partners, Inc." Harvard Business School Case 299-034, February 1999. (Revised June 2010.) View Details
  23. Hudson Manufacturing Company

    Concerns the decision by Brett Keith and Owen Colligan to purchase Hudson Manufacturing, a maker of heaters and air filtration units for the military. Keith and Colligan have organized a search fund and identified Hudson as a potential buyout. The decline in the trucking market and potential environmental contamination, however, stand to stop the deal.

    Keywords: Mergers and Acquisitions; Decision Choices and Conditions; Investment; Pollution and Pollutants; Industrial Products Industry; Manufacturing Industry;

    Citation:

    Gompers, Paul A., and Vanessa del Valle Broussard. "Hudson Manufacturing Company." Harvard Business School Case 203-064, March 2003. (Revised November 2009.) View Details
  24. Vueling Airlines

    Keywords: Air Transportation Industry;

    Citation:

    Gompers, Paul A., and Kristin A. Perry. "Vueling Airlines." Harvard Business School Case 808-077, March 2008. View Details
  25. Precise Software

    Yossi Sela, general partner at Gemini Venture capital, considers a new investment in Precise Software. The firm is at a crisis point, and Sela needs to decide whether he will fire the firm's chief executive officer. Conflicts between the American CEO and the Israeli founders of the firm are hampering the company.

    Keywords: Venture Capital; Investment; Resignation and Termination; Crisis Management; Managerial Roles; Conflict and Resolution; Israel; United States;

    Citation:

    Gompers, Paul A., and Sara Bergson. "Precise Software." Harvard Business School Case 204-157, April 2004. (Revised March 2008.) View Details
  26. New Oriental Education

    Keywords: Education Industry; China;

    Citation:

    Gompers, Paul A., and Kristin Perry. "New Oriental Education." Harvard Business School Case 807-129, May 2007. View Details
  27. Endeca Technologies: New Growth Opportunities

    Steve Papa, CEO of Endeca Technologies, must decide whether to expand into a new market with a new application of his company's technology. Endeca has experienced significant success with its information access software in the online retail industry, and in September 2004 is poised to enter similar industries with similar products. However, it also faces an opportunity to create a unique solution for the manufacturing industry, a market the company knows little about and that has proven difficult to enter in the past. Which expansion strategy should Papa choose? Although the manufacturing market would yield a much higher average deal size, significant uncertainty surrounded a move away from Endeca's core business. It would impact the company's sales practices, organizational structure, product requirements, and decisions about whether to partner with other companies in the field. Taylor Hunte Industries, a Fortune 500 giant in the manufacturing industry, has just invited Endeca to submit a request for proposal--due in just 10 days.

    Keywords: Decision Choices and Conditions; Market Entry and Exit; Production; Organizational Structure; Partners and Partnerships; Opportunities; Expansion; Online Technology; Software; Information Technology Industry;

    Citation:

    Gompers, Paul A., and Kristin Perry. "Endeca Technologies: New Growth Opportunities." Harvard Business School Case 206-041, April 2006. (Revised April 2007.) View Details
  28. Sarvega

    David Cowan, general partner at Bessemer Venture Partners, has taken the lead on Sarvega, a Bessemer-backed company that was recently orphaned by the departure of one of Bessemer's other general partners. Cowan must decide whether to reinvest in Sarvega and, if so, under what terms.

    Keywords: Decisions; Venture Capital; Investment; Governance Compliance; Resignation and Termination; Negotiation Deal; Partners and Partnerships; Information Technology Industry;

    Citation:

    Gompers, Paul A., and Vanessa del Valle Broussard. "Sarvega." Harvard Business School Case 204-137, May 2004. (Revised June 2004.) View Details
  29. Emergence of "Silicon Wadi", The

    Provides background information on the high-tech industry in Israel.

    Keywords: Software; Industry Clusters; Information Technology Industry; Israel;

    Citation:

    Gompers, Paul A., and Sara Bergson. Emergence of "Silicon Wadi", The. Harvard Business School Background Note 204-156, April 2004. View Details
  30. Venture Capital Fund Restructuring Vignettes (Abridged)

    This case examines the changes in fund structures proposed by four venture capital firms in 2002: Accel Partners, Battery Ventures, Charles River Ventures, and Kleiner Perkins Caufield & Byers. The venture capital market has experienced a major downturn, and these funds are trying to address investor concerns.

    Keywords: Venture Capital; Restructuring; Financial Crisis; Motivation and Incentives; Business and Shareholder Relations; Investment Funds; Financial Services Industry;

    Citation:

    Gompers, Paul A. "Venture Capital Fund Restructuring Vignettes (Abridged)." Harvard Business School Case 202-126, May 2002. View Details
  31. Ocular

    Concerns the decision of Ed Kennedy, co-founder of Ocular Networks, as he decides what financing strategy his firm should take. The venture capital and public markets for telecommunications start-ups had dried up and Kennedy must decide whether to cut costs and raise new venture capital money or seek a strategic acquirer.

    Keywords: Acquisition; Business Startups; Decisions; Venture Capital; Cost Management; Business Strategy; Telecommunications Industry;

    Citation:

    Gompers, Paul A., Gregor M. Andrade, and Jonathan Man. "Ocular." Harvard Business School Case 202-118, April 2002. View Details
  32. Knoll Furniture: Going Public

    This case examines the decisions of John Lynch, president and CEO of Knoll Furniture, to go public in early 1997. Knoll went private in an LBO in 1996 and Warburg Pincus, the LBO sponsor, wants Lynch to take Knoll public. Lynch needs to weigh the positive and negative issues of a public offering.

    Keywords: Leveraged Buyouts; Decisions; Initial Public Offering; Going Public; Privatization;

    Citation:

    Gompers, Paul A., and Jon Asher Daniels. "Knoll Furniture: Going Public." Harvard Business School Case 202-114, April 2002. View Details
  33. Parenting Magazine TN

    Teaching Note for (9-291-015). A rewritten version of an earlier teaching note.

    Keywords: Money; Capital; Capital Budgeting; Decisions; Cost Accounting; Economic Systems; Negotiation Process; Corporate Accountability; Negotiation Deal; Business Startups; Financial Strategy; Corporate Finance; Journalism and News Industry; Publishing Industry;

    Citation:

    Gompers, Paul A. "Parenting Magazine TN." Harvard Business School Teaching Note 202-065, December 2001. View Details
  34. Nantucket Nectars, TN

    Teaching Note for (9-898-171).

    Citation:

    Gompers, Paul A. "Nantucket Nectars, TN." Harvard Business School Teaching Note 202-074, December 2001. View Details
  35. Honest Tea, TN

    Teaching Note for (9-201-076).

    Citation:

    Gompers, Paul A. "Honest Tea, TN." Harvard Business School Teaching Note 202-069, December 2001. View Details
  36. Knot,The TN

    Teaching Note for (9-899-116).

    Keywords: Service Industry; Consulting Industry;

    Citation:

    Gompers, Paul A. "Knot,The TN." Harvard Business School Teaching Note 202-070, December 2001. View Details
  37. Record Masters, TN

    Teaching Note for (9-899-020).

    Keywords: Information Industry;

    Citation:

    Gompers, Paul A. "Record Masters, TN." Harvard Business School Teaching Note 202-075, December 2001. View Details
  38. Beta Golf TN

    Teaching Note for (9-898-162).

    Citation:

    Gompers, Paul A. "Beta Golf TN." Harvard Business School Teaching Note 202-062, December 2001. View Details
  39. Fenchel Lampshade Company TN

    Teaching Note for (9-291-014).

    Keywords: Manufacturing Industry;

    Citation:

    Gompers, Paul A. "Fenchel Lampshade Company TN." Harvard Business School Teaching Note 202-063, December 2001. View Details
  40. edocs, Inc. Series TN

    Teaching Note for (90200-015), (9-200-020), and (9-200-021).

    Keywords: Information Technology Industry;

    Citation:

    Gompers, Paul A. "edocs, Inc. Series TN." Harvard Business School Teaching Note 202-064, December 2001. View Details
  41. Cachet Technologies TN

    Teaching Note for (9-200-031).

    Keywords: Financial Services Industry;

    Citation:

    Gompers, Paul A. "Cachet Technologies TN." Harvard Business School Teaching Note 202-068, December 2001. View Details
  42. Dell Ventures TN

    Teaching Note for (9-200-062).

    Keywords: Computer Industry;

    Citation:

    Gompers, Paul A. "Dell Ventures TN." Harvard Business School Teaching Note 202-072, December 2001. View Details
  43. HIMSCORP, Inc., TN

    Teaching Note for (9-899-021).

    Keywords: Information Industry;

    Citation:

    Gompers, Paul A. "HIMSCORP, Inc., TN." Harvard Business School Teaching Note 202-073, December 2001. View Details
  44. Carlton Polish Co. TN

    Teaching Note for (9-283-008).

    Citation:

    Gompers, Paul A. "Carlton Polish Co. TN." Harvard Business School Teaching Note 202-076, December 2001. View Details
  45. Fitzpatrick Hotel Group (A)

    Examines the issues raised in the financing of the Fitzpatrick Hotel Group, an Irish hotelier. The perspective of Paddy Fitzpatrick, founder and CEO at Fitzpatrick Group, and Niall Carroll, founder of ACT Venture Capital, are contrasted.

    Keywords: Venture Capital; Perspective; Financing and Loans; Accommodations Industry; Republic of Ireland;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "Fitzpatrick Hotel Group (A)." Harvard Business School Case 298-002, January 1998. (Revised December 2001.) View Details
  46. Note on Strategic Alliances, A

    Presents an overview of strategic alliance. Discusses the academic literature and its implications for the structure of strategic alliances. Also details the types of strategic alliances utilized by small, growing firms.

    Keywords: Alliances; Strategy;

    Citation:

    Gompers, Paul A., and Alexander Tsai. "Note on Strategic Alliances, A." Harvard Business School Background Note 298-047, November 1997. (Revised October 2001.) View Details
  47. Dell Ventures

    Describes the rationale behind the strategy and structure of Dell Computer Corp.'s VC arm, Dell Ventures. While Dell Ventures had a phenomenal year one, it faced a number of challenges including dealing with market risks, finding and retaining talent, maintaining focus, and gaining the attention of Wall Street.

    Keywords: Business Divisions; Talent and Talent Management; Goals and Objectives; Risk Management; Organizational Structure; Interests; Business Strategy; Computer Industry;

    Citation:

    Gompers, Paul A., Carin-Isabel Knoop, and Cate Reavis. "Dell Ventures." Harvard Business School Case 200-062, May 2000. (Revised October 2001.) View Details
  48. Tutor Time (B)

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "Tutor Time (B)." Harvard Business School Case 297-074, June 1997. (Revised October 2001.) View Details
  49. Elliot Lebowitz

    Elliot Lebowitz, president and CEO of BioTransplant, must decide on a strategy for this young biotechnology start-up. Among the issues to be resolved are focus of research and search for strategic alliance partners.

    Keywords: Alliances; Research; Business Startups; Management Teams; Business Strategy; Biotechnology Industry; United States;

    Citation:

    Gompers, Paul A., and Alexander Tsai. "Elliot Lebowitz." Harvard Business School Case 297-094, June 1997. (Revised October 2001.) View Details
  50. A Note on Government Sources of Financing for Small Businesses

    Discusses issues related to government sources of financing for small business in the United States. In addition to presenting motivations for government financing programs, the note gives a detailed presentation of major federal programs to assist small business.

    Keywords: Corporate Finance; Business and Government Relations;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "A Note on Government Sources of Financing for Small Businesses." Harvard Business School Background Note 298-015, November 1997. (Revised October 2001.) View Details
  51. Torrent Systems

    Citation:

    Gompers, Paul A., and Benjamin Kaplan. "Torrent Systems." Harvard Business School Case 298-084, February 1998. (Revised October 2001.) View Details
  52. Honest Tea

    This case examines the decisions of Seth Goldman and Barry Nalebuff, founders of Honest Tea. Honest Tea is a start-up in the ready-to-drink tea market. Goldman and Nalebuff must craft an expansion and financing strategy.

    Keywords: Financial Strategy; Expansion; Business Startups; Growth and Development Strategy; Decisions;

    Citation:

    Gompers, Paul A. "Honest Tea." Harvard Business School Case 201-076, March 2001. (Revised October 2001.) View Details
  53. efficient market services: August 1993 (A)

    Penny Baron, vice president of efficient market services, must decide how to finance rapid expansion for a young market research company. Venture leasing is a possibility and terms are explored.

    Keywords: Venture Capital; Growth Management; Research; Marketing; Financing and Loans; Business Startups; Management Teams; Leasing; Service Industry; United States;

    Citation:

    Gompers, Paul A., and Jeffrey A. Farrell. "efficient market services: August 1993 (A)." Harvard Business School Case 298-009, September 1997. (Revised October 2001.) View Details
  54. efficient market services: August 1993 (B-1), ems Management

    Supplements the (A) case.

    Keywords: Service Industry;

    Citation:

    Gompers, Paul A., and Jeffrey A. Farrell. "efficient market services: August 1993 (B-1), ems Management." Harvard Business School Case 298-010, September 1997. (Revised October 2001.) View Details
  55. efficient market services: August 1993 (B-2), Comdisco Ventures

    Supplements the (A) case.

    Keywords: Service Industry;

    Citation:

    Gompers, Paul A., and Jeffrey A. Farrell. "efficient market services: August 1993 (B-2), Comdisco Ventures." Harvard Business School Case 298-011, February 1998. (Revised October 2001.) View Details
  56. Xedia and Silicon Valley Bank (A)

    Xedia, a networking equipment manufacturer that helps provide high-speed Internet service for corporate clients through access routing, wants a bridge loan to fund daily operations until it raises its next round of equity financing.

    Keywords: Venture Capital; Equity; Financing and Loans; Negotiation; Production; Internet; Banking Industry;

    Citation:

    Gompers, Paul A., and Jon Biotti. "Xedia and Silicon Valley Bank (A)." Harvard Business School Case 298-119, March 1998. (Revised October 2001.) View Details
  57. Xedia and Silicon Valley Bank (B-1): The Bank's Perspective

    Supplements the (A) case.

    Keywords: Banking Industry;

    Citation:

    Gompers, Paul A., and Jon Biotti. "Xedia and Silicon Valley Bank (B-1): The Bank's Perspective." Harvard Business School Case 298-120, March 1998. (Revised October 2001.) View Details
  58. Xedia and Silicon Valley Bank (B-2): The Company's Perspective

    Supplements the (A) case.

    Keywords: Banking Industry;

    Citation:

    Gompers, Paul A., and Jon Biotti. "Xedia and Silicon Valley Bank (B-2): The Company's Perspective." Harvard Business School Case 298-121, March 1998. (Revised October 2001.) View Details
  59. Xedia and Silicon Valley Bank (C): The Final Agreement

    Supplements the (A) case.

    Keywords: Banking Industry;

    Citation:

    Gompers, Paul A., and Jon Biotti. "Xedia and Silicon Valley Bank (C): The Final Agreement." Harvard Business School Case 298-122, March 1998. (Revised October 2001.) View Details
  60. edocs, Inc. (B-1): Kevin Laracey

    Supplements the (A) case.

    Keywords: Information Technology Industry;

    Citation:

    Gompers, Paul A. "edocs, Inc. (B-1): Kevin Laracey." Harvard Business School Case 200-020, February 2000. (Revised September 2001.) View Details
  61. edocs, Inc. (B-2): Jonathon Guerster

    Supplements the (A) case.

    Keywords: Information Technology Industry;

    Citation:

    Gompers, Paul A. "edocs, Inc. (B-2): Jonathon Guerster." Harvard Business School Case 200-021, February 2000. (Revised September 2001.) View Details
  62. Genset: 1989

    Discusses the start-up strategy at Genset, a French biotech firm. Pascal Brandys, a venture capitalist, and Marc Vasseur, a leading French scientist, must decide how to proceed. Future real options are central to the strategy.

    Keywords: Strategy; Venture Capital; Business Startups; Biotechnology Industry; France;

    Citation:

    Gompers, Paul A., and Amy Burroughs. "Genset: 1989." Harvard Business School Case 298-070, January 1998. (Revised September 2001.) View Details
  63. A Note on Angel Financing

    Discusses the economics of the private equity market and recent efforts by the U.S. Small Business Administration to promote greater angel financing.

    Keywords: Financial Markets; Government and Politics; Financing and Loans; Financial Services Industry; United States;

    Citation:

    Gompers, Paul A. "A Note on Angel Financing." Harvard Business School Background Note 298-083, January 1998. (Revised September 2001.) View Details
  64. Penelope's Personal Pocket Phones

    Provides students with an opportunity to use simple real options analysis to value a startup. Penelope Phillips is deciding whether to start a company to make wireless phones. Students get experience using traditional discounted cash flow valuation and a real options approach.

    Keywords: Valuation; Entrepreneurship; Business Startups; Wireless Technology; Capital Budgeting; Corporate Finance; Manufacturing Industry; Electronics Industry;

    Citation:

    Gompers, Paul A. "Penelope's Personal Pocket Phones." Harvard Business School Case 299-004, April 1999. (Revised September 2001.) View Details
  65. edocs, Inc. (A)

    Describes the development of edocs, an Internet company aimed at revolutionizing the on-line bill presentment market. Kevin Laracey must negotiate a venture capital investment with Jonathon Guerster, an associate at Charles River Ventures. Can be used as a role-playing exercise in negotiating a venture capital deal.

    Keywords: Venture Capital; Investment; Growth and Development; Negotiation Deal; Internet; Information Technology Industry;

    Citation:

    Gompers, Paul A. "edocs, Inc. (A)." Harvard Business School Case 200-015, February 2000. (Revised September 2001.) View Details
  66. A Note on the Venture Capital Industry

    The history of the venture capital industry is reviewed, and the key institutional features described.

    Keywords: Venture Capital;

    Citation:

    Gompers, Paul A., and Josh Lerner. "A Note on the Venture Capital Industry." Harvard Business School Background Note 295-065, November 1994. (Revised July 2001.) View Details
  67. Introduction to Entrepreneurial Finance

    Presents an overview of the issues covered in Entrepreneurial Finance. The frameworks of analysis as well as themes of the course are covered. Additionally, provides references on entrepreneurial finance from both academics and the popular press.

    Keywords: Entrepreneurship; Corporate Finance;

    Citation:

    Gompers, Paul A. "Introduction to Entrepreneurial Finance." Harvard Business School Background Note 298-061, November 1997. (Revised May 2001.) View Details
  68. Genset Initial Public Offering (A)

    Pascal Brandys, founder and CEO of Genset, must decide whether to take this young biotechnology company public. If so, should he do a dual offering in both France and the U.S.? The case also explores the business models in genomics research.

    Keywords: Business Model; Initial Public Offering; Genetics; Going Public; Management Teams; Biotechnology Industry; France; United States;

    Citation:

    Gompers, Paul A., and Jeffrey M. Anapolsky. "Genset Initial Public Offering (A)." Harvard Business School Case 297-096, June 1997. (Revised March 2001.) View Details
  69. Bang Networks, Inc.

    Bob Rosin, president and CEO of Bang Networks, must decide how much debt financing to take on. The company is a raw start-up and is considering taking on $10 million in debt. The firm has six offers and needs to identify the best one.

    Keywords: Business Startups; Restructuring; Decisions; Borrowing and Debt; Venture Capital;

    Citation:

    Gompers, Paul A., and Sergio Rattner. "Bang Networks, Inc." Harvard Business School Case 201-074, February 2001. View Details
  70. ALWAYSi

    Anthony Soohoo, COO at ALWAYSi, an independent film distributor, is preparing projections for the company. Soohoo must decide which revenue streams the company should pursue. The firm is faced with a variety of attractive opportunities.

    Keywords: Forecasting and Prediction; Business Strategy; Revenue; Film Entertainment; Strategic Planning; Business Startups; Entertainment and Recreation Industry;

    Citation:

    Gompers, Paul A., and Sergio Rattner. "ALWAYSi." Harvard Business School Case 201-075, February 2001. View Details
  71. Pet Doctors: 1999

    Describes the decisions confronting David Hodges and Garret Turley about whether to grow their chain of veterinary clinics in the United Kingdom. Turley and Hodges must decide whether to attempt to speed up their acquisition pace and raise venture capital.

    Keywords: Decisions; Venture Capital; Expansion; Acquisition; Service Industry; United Kingdom;

    Citation:

    Gompers, Paul A., and David James Alexander Grant. "Pet Doctors: 1999." Harvard Business School Case 200-016, February 2000. (Revised March 2000.) View Details
  72. ZEFER: November 1998

    ZEFER, a young Internet professional service firm, is considering its expansion options. Organic growth versus growth by acquisition is a central theme. The firm's financing strategy will be determined by its business strategy.

    Keywords: Acquisition; Financial Strategy; Service Operations; Business Strategy; Expansion; Internet; Service Industry;

    Citation:

    Gompers, Paul A. "ZEFER: November 1998." Harvard Business School Case 299-032, January 1999. (Revised March 2000.) View Details
  73. Cachet Technologies

    Describes the decision facing Danny Lewin, Jonathan Seelig, and Tom Leighton, the founders of Cachet Technologies, an MIT spin-out. The firm has done poorly in the annual MIT business plan competition and the founders have to decide whether to continue.

    Keywords: Decision Making; Business Startups; Business Plan; Failure; Cooperative Ownership; Business Strategy; Financial Services Industry;

    Citation:

    Gompers, Paul A., and Howard Reitz. "Cachet Technologies." Harvard Business School Case 200-031, January 2000. (Revised March 2000.) View Details
  74. Fitzpatrick Hotel Group (B1): Niall Carroll

    Supplements the (A) case.

    Keywords: Venture Capital; Perspective; Financing and Loans; Accommodations Industry; Republic of Ireland;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "Fitzpatrick Hotel Group (B1): Niall Carroll." Harvard Business School Case 298-003, January 1998. (Revised May 1999.) View Details
  75. Fitzpatrick Hotel Group (B-2): Paddy Fitzpatrick

    Supplements the (A) case.

    Keywords: Venture Capital; Perspective; Financing and Loans; Accommodations Industry; Republic of Ireland;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "Fitzpatrick Hotel Group (B-2): Paddy Fitzpatrick." Harvard Business School Case 298-004, January 1998. (Revised May 1999.) View Details
  76. MSE, Inc. Privatization: August 1997 & MSE,Inc. Privatization: August 1997 (Abridged) TN

    Keywords: Privatization;

    Citation:

    Gompers, Paul A. "MSE, Inc. Privatization: August 1997 & MSE,Inc. Privatization: August 1997 (Abridged) TN." Harvard Business School Teaching Note 299-067, May 1999. View Details
  77. Penelope's Personal Pocket Phones TN

    Teaching Note for (9-299-004).

    Citation:

    Gompers, Paul A. "Penelope's Personal Pocket Phones TN." Harvard Business School Teaching Note 299-070, May 1999. View Details
  78. Knightsbridge Advisers, Inc. TN

    Citation:

    Gompers, Paul A. "Knightsbridge Advisers, Inc. TN." Harvard Business School Teaching Note 299-066, May 1999. View Details
  79. New York Bagel: Hungary, April 1994 TN

    Keywords: Food and Beverage Industry; Hungary;

    Citation:

    Gompers, Paul A. "New York Bagel: Hungary, April 1994 TN." Harvard Business School Teaching Note 299-068, May 1999. View Details
  80. Venture Capital in Ireland: Getting Their ACT Together TN

    Teaching Note for (9-298-001).

    Keywords: Financial Services Industry; Republic of Ireland;

    Citation:

    Gompers, Paul A. "Venture Capital in Ireland: Getting Their ACT Together TN." Harvard Business School Teaching Note 299-075, May 1999. View Details
  81. ZEFER: November 1998 TN

    Teaching Note for (9-299-032).

    Keywords: Service Industry;

    Citation:

    Gompers, Paul A. "ZEFER: November 1998 TN." Harvard Business School Teaching Note 299-077, May 1999. View Details
  82. BioTransplant Inc.: Initial Public Offering, January 1996 TN

    Teaching Note for (9-297-095).

    Citation:

    Gompers, Paul A. "BioTransplant Inc.: Initial Public Offering, January 1996 TN." Harvard Business School Teaching Note 299-055, May 1999. View Details
  83. Cambridge Technology Partners: Corporate Venturing (August 1996) TN

    Teaching Note for (9-297-033).

    Keywords: Information Technology Industry; Consulting Industry; Cambridge;

    Citation:

    Gompers, Paul A. "Cambridge Technology Partners: Corporate Venturing (August 1996) TN." Harvard Business School Teaching Note 299-056, May 1999. View Details
  84. Fitzpatrick Hotel Group Series TN

    Teaching Note for (9-298-002), (9-298-003), and (9-298-004).

    Keywords: Republic of Ireland;

    Citation:

    Gompers, Paul A. "Fitzpatrick Hotel Group Series TN." Harvard Business School Teaching Note 299-062, May 1999. View Details
  85. Global Digital Utilities Corporation TN

    Keywords: Utilities Industry;

    Citation:

    Gompers, Paul A. "Global Digital Utilities Corporation TN." Harvard Business School Teaching Note 299-065, May 1999. View Details
  86. APV Technology Partners II, L.P. TN

    Keywords: Technology Industry;

    Citation:

    Gompers, Paul A. "APV Technology Partners II, L.P. TN." Harvard Business School Teaching Note 299-053, May 1999. View Details
  87. efficient market services: August 1993 Series TN

    Teaching Note for (9-298-009), (9-298-010), and (9-298-011).

    Keywords: Service Industry;

    Citation:

    Gompers, Paul A. "efficient market services: August 1993 Series TN." Harvard Business School Teaching Note 299-061, May 1999. View Details
  88. Tutor Time (A) TN

    Citation:

    Gompers, Paul A. "Tutor Time (A) TN." Harvard Business School Teaching Note 299-074, May 1999. View Details
  89. Xedia and Silicon Valley Bank Series TN

    Teaching Note for (9-298-119), (9-298-120), (9-298-121), and (9-298-122).

    Keywords: Banking Industry;

    Citation:

    Gompers, Paul A. "Xedia and Silicon Valley Bank Series TN." Harvard Business School Teaching Note 299-076, May 1999. View Details
  90. Tutor Time (B) TN

    Citation:

    Gompers, Paul A. "Tutor Time (B) TN." Harvard Business School Teaching Note 299-078, May 1999. View Details
  91. Car Wash Partners, Inc. TN

    Teaching Note for (9-299-034).

    Keywords: Financing and Loans; Investment; Strategy; Negotiation Deal; Venture Capital; Service Industry;

    Citation:

    Gompers, Paul A. "Car Wash Partners, Inc. TN." Harvard Business School Teaching Note 299-058, May 1999. View Details
  92. Advent Israel Venture Capital Program TN

    Teaching Note for (9-298-072).

    Keywords: Financial Services Industry; Israel;

    Citation:

    Gompers, Paul A. "Advent Israel Venture Capital Program TN." Harvard Business School Teaching Note 299-054, May 1999. View Details
  93. Cambridge Technology Partners - 1991 Start Up TN

    Teaching Note for (9-298-044).

    Keywords: Information Technology Industry; Consulting Industry; Cambridge;

    Citation:

    Gompers, Paul A. "Cambridge Technology Partners - 1991 Start Up TN." Harvard Business School Teaching Note 299-057, May 1999. View Details
  94. Digital Everywhere, Inc. TN

    Teaching Note for (9-298-099).

    Citation:

    Gompers, Paul A. "Digital Everywhere, Inc. TN." Harvard Business School Teaching Note 299-059, May 1999. View Details
  95. Elliot Lebowitz TN

    Teaching Note for (9-297-094).

    Keywords: Biotechnology Industry;

    Citation:

    Gompers, Paul A. "Elliot Lebowitz TN." Harvard Business School Teaching Note 299-060, May 1999. View Details
  96. Genset: 1989 TN

    Teaching Note for (9-298-070).

    Keywords: Biotechnology Industry; France;

    Citation:

    Gompers, Paul A. "Genset: 1989 TN." Harvard Business School Teaching Note 299-063, May 1999. View Details
  97. Genset Initial Public Offering (A) & (B) TN

    Teaching Note for (9-297-096) and (9-297-097).

    Keywords: Biotechnology Industry; United States; France;

    Citation:

    Gompers, Paul A. "Genset Initial Public Offering (A) & (B) TN." Harvard Business School Teaching Note 299-064, May 1999. View Details
  98. NSK Software Technologies Ltd. TN

    Teaching Note for (9-298-071).

    Keywords: Information Technology Industry; Israel;

    Citation:

    Gompers, Paul A. "NSK Software Technologies Ltd. TN." Harvard Business School Teaching Note 299-069, May 1999. View Details
  99. Prague Post, The TN

    Teaching Note for (9-299-033).

    Keywords: Publishing Industry; Czech Republic;

    Citation:

    Gompers, Paul A. "Prague Post, The TN." Harvard Business School Teaching Note 299-071, May 1999. View Details
  100. Torrent Systems TN

    Citation:

    Gompers, Paul A. "Torrent Systems TN." Harvard Business School Teaching Note 299-073, May 1999. View Details
  101. Prague Post, The

    Lisa Frankenberg, co-founder of the Prague Post, is faced with several business and professional decisions. The English-language paper she founded is under pressure from competition and a Czech Republic recession. She must decide how to return the paper to profitability. Similarly, Frankenberg must decide whether to come back to the United States to start a consulting job.

    Keywords: Growth and Development Strategy; Decisions; Decision Choices and Conditions; Profit; Competition; Financial Crisis; Personal Development and Career; Publishing Industry; Czech Republic;

    Citation:

    Gompers, Paul A. "Prague Post, The ." Harvard Business School Case 299-033, January 1999. View Details
  102. A Note on Valuation in Entrepreneurial Ventures

    Discusses various valuation methodologies for analyzing entrepreneurial firms. Gives a description of the methodologies and describes when each method is appropriate.

    Keywords: Valuation; Business Ventures; Entrepreneurship;

    Citation:

    Gompers, Paul A. "A Note on Valuation in Entrepreneurial Ventures." Harvard Business School Background Note 298-082, January 1998. (Revised January 1999.) View Details
  103. Cambridge Technology Partners: Corporate Venturing (August 1996)

    Concerns the decision of Jim Sims, president and CEO of Cambridge Technology Partners (CTP) to form a corporate venture capital subsidiary. CTP is a fast-growing information technology consulting firm that has been presented with many investment opportunities from clients and employees.

    Keywords: Decisions; Venture Capital; Leadership; Information Technology; Investment; Opportunities; Customer Focus and Relationships; Business Startups; Business Subsidiaries; Information Technology Industry; Consulting Industry; Cambridge;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "Cambridge Technology Partners: Corporate Venturing (August 1996)." Harvard Business School Case 297-033, March 1997. (Revised January 1999.) View Details
  104. Digital Everywhere, Inc.

    Presents a valuation problem in a fictitious firm, Digital Everywhere. Students have the opportunity to compare various discounted cash flow valuation models in an entrepreneurial firm.

    Keywords: Cash Flow; Valuation; Entrepreneurship;

    Citation:

    Gompers, Paul A. "Digital Everywhere, Inc." Harvard Business School Case 298-099, February 1998. (Revised January 1999.) View Details
  105. NSK Software Technologies Ltd.

    Discusses the efforts of three Israeli software engineers' efforts to bring a network security software product to market. The firm needs an investment to complete programming and start marketing.

    Keywords: Software; Financing and Loans; Product Development; Information Technology Industry; Israel;

    Citation:

    Gompers, Paul A., and Jeffrey M. Anapolsky. "NSK Software Technologies Ltd." Harvard Business School Case 298-071, January 1998. (Revised December 1998.) View Details
  106. Sky Air, Inc.

    Concerns a fictitious airline company and examines the moral hazard situation that results within a firm. Provides an opportunity to discuss corporate governance and contracting under uncertainty.

    Keywords: Ethics; Corporate Governance; Contracts; Risk and Uncertainty; Air Transportation Industry;

    Citation:

    Gompers, Paul A. "Sky Air, Inc." Harvard Business School Case 297-110, June 1997. (Revised November 1998.) View Details
  107. Tutor Time (A)

    Keywords: Education Industry;

    Citation:

    Gompers, Paul A. "Tutor Time (A)." Harvard Business School Case 297-064, June 1997. (Revised November 1998.) View Details
  108. Cambridge Technology Partners - 1991 Start Up

    Jim Sims tries to close the deal to create Cambridge Technology Partners (CTP) in a spin-out from a troubled technology consulting firm. The deal looks tenuous.

    Keywords: Business Startups; Negotiation Deal; Technology; Organizations; Information Technology Industry; Consulting Industry; Cambridge;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "Cambridge Technology Partners - 1991 Start Up." Harvard Business School Case 298-044, August 1997. (Revised November 1998.) View Details
  109. MSE, Inc. Privatization: August 1997

    Keywords: Privatization; Alliances;

    Citation:

    Gompers, Paul A., and Alexander Tsai. "MSE, Inc. Privatization: August 1997." Harvard Business School Case 298-135, June 1998. View Details
  110. Venture Capital in Ireland: Getting Their ACT Together

    Analyzes the decisions of Niall Carroll, an Irish banker, to start a venture capital fund focused on Ireland. The context of the Irish markets and the nature of Irish opportunities are explored.

    Keywords: Business Startups; Venture Capital; Markets; Market Entry and Exit; Financial Services Industry; Republic of Ireland;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "Venture Capital in Ireland: Getting Their ACT Together." Harvard Business School Case 298-001, April 1998. View Details
  111. Advent Israel Venture Capital Program, The

    Explores the decision by Advent, an international venture capital firm, to start a fund focused on Israel. Advent must decide who to hire to run the fund and how much money to raise.

    Keywords: Venture Capital; Global Strategy; Recruitment; Expansion; Business Strategy; Financial Services Industry; Israel;

    Citation:

    Gompers, Paul A., and Jeffrey M. Anapolsky. "Advent Israel Venture Capital Program, The ." Harvard Business School Case 298-072, April 1998. View Details
  112. MSE, Inc. Privatization: August 1997 (Abridged)

    Citation:

    Gompers, Paul A., and Alexander Tsai. "MSE, Inc. Privatization: August 1997 (Abridged)." Harvard Business School Case 298-136, April 1998. View Details
  113. Contracting and Control in Venture Capital

    Discusses the control mechanisms and contracts utilized by venture capitalists. The emphasis is on understanding potential conflicts of interest and how the contracts mitigate those conflicts.

    Keywords: Venture Capital; Governance Controls; Contracts; Business or Company Management; Conflict of Interests;

    Citation:

    Gompers, Paul A. "Contracting and Control in Venture Capital." Harvard Business School Background Note 298-067, February 1998. View Details
  114. APV Technology Partners II, L.P.

    Keywords: Technology Industry;

    Citation:

    Gompers, Paul A., and Jeffrey M. Anapolsky. "APV Technology Partners II, L.P." Harvard Business School Case 298-048, August 1997. (Revised September 1997.) View Details
  115. Genset Initial Public Offering (B)

    Supplements the (A) case.

    Keywords: Business Model; Initial Public Offering; Genetics; Going Public; Management Teams; Biotechnology Industry; France; United States;

    Citation:

    Gompers, Paul A., and Jeffrey M. Anapolsky. "Genset Initial Public Offering (B)." Harvard Business School Case 297-097, June 1997. (Revised September 1997.) View Details
  116. Global Digital Utilities Corporation

    Keywords: Technology Industry;

    Citation:

    Gompers, Paul A. "Global Digital Utilities Corporation." Harvard Business School Case 297-065, June 1997. View Details
  117. New York Bagel: Hungary, April 1994

    Keywords: Food and Beverage Industry; Hungary;

    Citation:

    Gompers, Paul A., and Catherine M. Conneely. "New York Bagel: Hungary, April 1994." Harvard Business School Case 297-078, June 1997. View Details
  118. A Note on the Internet

    Examines the evolution and structure of the Internet. A particular focus is placed on various business segments and possible applications of Internet technology.

    Keywords: Industry Structures; Internet; Online Technology;

    Citation:

    Gompers, Paul A., and Jeffrey A. Farrell. "A Note on the Internet." Harvard Business School Background Note 297-109, June 1997. View Details
  119. BioTransplant, Inc.: Initial Public Offering, January 1996

    Examines the decision to go public. BioTransplant is an early stage biotechnology company that must decide how to finance its research and development. The pros and cons of public offerings are analyzed versus alternative financing sources.

    Keywords: Initial Public Offering; Financing and Loans; Research and Development; Going Public;

    Citation:

    Gompers, Paul A., and Alexander Tsai. "BioTransplant, Inc.: Initial Public Offering, January 1996." Harvard Business School Case 297-095, March 1997. View Details
  120. Knightsbridge Advisers, Inc.

    Citation:

    Gompers, Paul A. "Knightsbridge Advisers, Inc." Harvard Business School Case 296-054, February 1996. View Details

Other Publications and Materials

  1. Capital Formation and Investment in Venture Markets: Implications for the Advanced Technology Program

    Citation:

    Gompers, Paul, and Josh Lerner. "Capital Formation and Investment in Venture Markets: Implications for the Advanced Technology Program." December 1999. (A Report to the Advanced Technology Program and the National Bureau of Economic Research.) View Details
  2. To Err is Human. To Forgive is a Mistake

    Citation:

    Gompers, Paul A., Yuhai Xuan, and Vladimir Mukharlyamov. "To Err is Human. To Forgive is a Mistake." 2012. View Details
  3. Bridge Building in Venture Capital-Backed Acquisitions

    We study the role of common venture capital investors in alleviating asymmetric information between public acquirers and private venture capital-backed targets. We find that acquisition announcement returns are more positive for acquisitions in which both the target and the acquirer are financed by the same venture capital firm. Similarly, having a common investor increases the likelihood that a transaction will be all equity-financed and the likelihood that an acquisition will take place. Our results suggest that common venture capital investors can form a bridge between acquiring and target firms that reduces asymmetric information associated with the transaction for both parties.

    Keywords: Mergers and Acquisitions; Venture Capital; Private Equity; Knowledge Sharing; Market Transactions;

    Citation:

    Gompers, Paul A., and Yuhai Xuan. "Bridge Building in Venture Capital-Backed Acquisitions." 2009. View Details
  4. Reputation and Contractual Flexibility: Evidence from Venture Capital Distribution Pricing Policy

    Keywords: Reputation; Contracts; Venture Capital; Price;

    Citation:

    Gompers, Paul A., Andrew Metrick, and Timothy Dore. "Reputation and Contractual Flexibility: Evidence from Venture Capital Distribution Pricing Policy." January 2009. View Details
  5. Why Experienced Venture Capitalists Leave Money on the Table: Evidence from Initial Public Offerings

    Citation:

    Gompers, P., A. Brav, and Timothy Dore. "Why Experienced Venture Capitalists Leave Money on the Table: Evidence from Initial Public Offerings." View Details
  6. Venture Capital and Private Equity Distributions: Pricing Policies and Price Reactions

    Citation:

    Gompers, P., Andrew Metrick, and Timothy Dore. "Venture Capital and Private Equity Distributions: Pricing Policies and Price Reactions." View Details
  7. Venture Capital Investment Cycles: The Role of Experience and Specialization

    Keywords: Venture Capital;

    Citation:

    Gompers, P., Anna R. Kovner, Josh Lerner, and David S. Scharfstein. "Venture Capital Investment Cycles: The Role of Experience and Specialization." December 2005. View Details
  8. Institutions, Capital Constraints and Entrepreneurial Firm Dynamics: Evidence from Europe

    Keywords: Corporate Entrepreneurship; Capital; Europe;

    Citation:

    Desai, Mihir, Paul Gompers, and Josh Lerner. "Institutions, Capital Constraints and Entrepreneurial Firm Dynamics: Evidence from Europe." NBER Working Paper Series, June 2005. View Details
  9. Large Blocks of Stock: Prevalence, Size, and Measurement

    Keywords: Measurement and Metrics;

    Citation:

    Gompers, P., Andrew Metrick, Rudi Fahlenbrach, and Jennifer Lauren Dlugosz. "Large Blocks of Stock: Prevalence, Size, and Measurement." January 2005. View Details
  10. The Role of Venture Capital in the Acquisition of Private Companies

    Keywords: Venture Capital; Acquisition; Private Ownership;

    Citation:

    Gompers, P., and Yuhai Xuan. "The Role of Venture Capital in the Acquisition of Private Companies." October 2004. View Details
  11. Executive Ownership and Control in Newly Public Firms: The Role of Venture Capitalists

    We study the implications of CEO equity ownership for incentives and control in a sample of 1,011 newly public firms. Before an initial public offering, equity investments by venture capitalists reduce CEO ownership by about half, from an average of 35 percent to 19 percent. Venture capitalists narrow this difference by granting options, reducing secondary sales, and lowering the dilution by primary shares, but a gap in post-IPO CEO equity ownership remains. The effect of this lower ownership on incentives depends upon the measure employed - the dollar sensitivity of CEO pay to firm value is lower in venture firms, but the elasticity is about the same. In addition, we present evidence that lower ownership, combined with concentrated outside holdings, leads to a reduction in the agency costs of managerial control. We conclude that the patterns of ownership in part represent a tradeoff by venture capitalists between the benefits of incentives and the agency costs of control.

    Keywords: Equity; Ownership; Motivation and Incentives; Initial Public Offering; Investment; Venture Capital; Managerial Roles; Cost Management; Governance Controls; Executive Compensation;

    Citation:

    Baker, Malcolm, and Paul Gompers. "Executive Ownership and Control in Newly Public Firms: The Role of Venture Capitalists." November 1999. (First draft in 1998.) View Details
  12. Ownership and Control in Entrepreneurial Firms: An Examination of Convertible Securities in Venture Capital Investment

    Keywords: Business Startups; Ownership; Management; Debt Securities; Venture Capital;

    Citation:

    Gompers, Paul A. "Ownership and Control in Entrepreneurial Firms: An Examination of Convertible Securities in Venture Capital Investment." January 1999. View Details

    Research Summary

  1. Venture Capital Organizations and Entrepreneurial Finance

    Paul A. Gompers is examining corporate control and governance issues in venture capital organizations and entrepreneurial firms in an effort to understand how their relationships with their investors affect the venture capitalists' investment decisions. Using theoretical models, large-sample empirical research, and field-based case studies, Gompers is examining the governance structures-covenants, restrictions, and compensation-employed in venture capital organizations. He is also examining the relationships between venture capitalists and the entrepreneurs they finance in an effort to identify the control mechanisms the former employ to influence the latter, and is attempting to identify the determinants of success and failure in venture capital-backed companies. Gompers is developing from his findings course materials on venture capital and entrepreneurial finance.
  2. Long-Run Performance Following Equity Issue

    In an effort to establish how the transition from private to public firm affects performance, Paul A. Gompers is examining the long-run performance of companies that issue equity in an initial public or seasoned offering. He is also attempting to determine whether involvement with a venture capital backer improves performance. Gompers is using recent innovations in multifactor asset-pricing models to evaluate firm performance and is developing new methods of measuring performance in varied settings. His findings to date demonstrate that underperformance is concentrated in small companies, not backed by venture capitalists, that went public in the early 1980s.
  3. Financing New Business Formation

    New business creation has become a potent force for economicdevelopment in the United States. Prior to 1980, large firms created the majority of new jobs in the American economy. While considerable debate rages over whether small firms are the source of recent job creation, it is clear from the data that new firms are an important source of technology, innovation, and jobs. No one would call Microsoft, Apple, or Genentech small companies, but all of them are very young. From 1972 through 1992, more than 4,513 companies went public by issuing equity in an initial public offering. Most of these firms were less than ten years old. New firms continue to transform the economic landscape, but we know very little about the sources of capital and investment behavior of these firms before they go public.
    A goal of the project would be research projects related to optimal sources of financing. Some of the research questions that Professor Gompers is addressing include: How do industry and firm specific characteristics interact to determine the optimal source of capital? How does firm performance affect who gives firms their financing to grow? How do the sources of financing affect the speed at which the firm can grow? Have there been secular changes in the sources of financing over the time period? Does the presence of a professional investor, such as a venture capitalist, improve the pre-public performance of a company (e.g. can it reach a critical size sooner) compared to a firm that has not received venture capital financing.

      Awards & Honors

    1. Geewax, Terker & Company Prize in Investment Research: Winner of the 2002 Geewax, Terker & Company Prize in Investment Research offered by the Rodney L. White Center at Wharton for "Corporate Governance and Equity Prices" (with Joy L. Ishii and Andrew Metrick, Quarterly Journal of Economics, February 2003).