Does Going Public Affect Innovation?

S.  Bernstein

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Article | Journal of Finance

Does Going Public Affect Innovation?

by S. Bernstein

Format: Print

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Bernstein, S. "Does Going Public Affect Innovation?" Journal of Finance 70, no. 4 (August 2015): 1365–1403. (Brattle Prize Winner for Best Paper in the Journal of Finance.)

About the Author

Shai Benjamin Bernstein

Associate Professor of Business Administration

Entrepreneurial Management

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Bernstein, Shai. "CleanWater, Inc.: Running Dry & Out of Time." Harvard Business School Teaching Note 821-048, October 2020. View Details

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NewView Capital and Venture Capital Secondaries

Shai Bernstein

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Bernstein, Shai. "NewView Capital and Venture Capital Secondaries." Harvard Business School Teaching Note 821-049, October 2020. View Details

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Working Paper | HBS Working Paper Series | 2020

Does Venture Capital Attract Human Capital? Evidence from a Randomized Field Experiment

Shai Bernstein, Kunal Mehta and Richard Townsend

Attracting talent is widely believed to be critical to the success of a startup. In this paper, we investigate whether potential employee interest in a startup is affected by venture capital funding. We do so by analyzing a field experiment conducted on Angel-List Talent, a large online search platform for startup jobs. In the experiment, whether a startup was funded by top-tier VCs and/or whether it was funded recently is randomly highlighted in search results. We find that the same startup receives significantly more interest from potential employees when the fact that it was funded by a top-tier VC is highlighted. In contrast, highlighting the fact that a startup was funded recently has no effect. High-quality job candidates care the most about the identities of startup investors. The results provide direct evidence of the certification role played by VCs and their impact on the labor market.

Keywords: Startup; funding; Venture Capital; Business Startups; Employees; Attitudes;

Citation:
Bernstein, Shai, Kunal Mehta, and Richard Townsend. "Does Venture Capital Attract Human Capital? Evidence from a Randomized Field Experiment." Harvard Business School Working Paper, No. 21-049, October 2020. View Details

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Does Going Public Affect Innovation?

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