I'm an Assistant Professor of Finance at the Darden School of Business, University of Virginia.
My research interests are in empirical corporate finance and financial intermediation. Specifically, I'm interested in venture capital and private equity.
I teach Financial Management & Policies, and Entrepreneurial Finance & Private Equity in the MBA and EMBA curriculum.
Revise and resubmit, Journal of Financial and Quantitative Analysis
While existing studies confirm venture capitalists’ (VCs) monitoring ability, evidence of their screening ability remains inconclusive. To confirm VCs’ screening role, I build on within-individual variation in VC partners’ workload and attention stemming from engagement in their portfolio companies’ IPOs. I find that when VCs are busy and distracted, they tend to make underperforming investments. The effects are stronger in cases of higher workload intensity and higher information asymmetry. These results speak to the importance of screening for generating venture capital returns, and point to the meaningful economic tradeoff between engaging with existing companies and screening of new startups.
Presentations: SFS Cavalcade North America 2020, PERC Private Equity Research Symposium (Oxford, 2019), Annual Private Capital Research Conference (Montreux, 2019), KWC Conference on Entrepreneurial Finance (Lund, 2019), FMA (2019), BI Oslo, Copenhagen Business School, U of Lausanne, HKU Business School, IE Business School, Tilburg, U of Amsterdam, U of Geneva, U of Iowa Tippie College of Business, UVA Darden, VU Amsterdam
The Value of Privacy and the Choice of Limited Partners by Venture Capitalists with Will Gornall and Ilya Strebulaev
Revise and resubmit, Journal of Financial Economics
We study how information disclosure concerns shape the choice of limited partners by venture capital firms. Late-2002 court rulings stopped public investors from providing confidentiality to private equity firms. The best-performing venture capital firms, but not other firms, responded by excluding public investors from their new funds. We argue that this effect is caused by excess investor demand resulting from an inability to scale the VC model. To preserve relationships, many public investors agreed to receive less information: rules forcing disclosure by principals led agents to hide information from their principals.
Presentations: 34th Mitsui Finance Symposium (2023), SFS Cavalcade North America 2023, MFA 2023, IPC Spring Research Symposium 2023, Commonwealth Finance Workshop 2022, European FA 2022 (Barcelona), PERC Private Equity Research Symposium (Oxford, 2022), Esade Business School*, Stanford PhD Seminar
Media coverage: The FinReg Blog
Do Banks Compete on Non-Price Terms? Evidence from Loan Covenants with Christoph Herpfer and Roberto Steri
We study the interplay between non-price loan terms and competition in credit markets. We exploit a regulatory shock to regulated banks' ability to offer favorable non-price terms, particularly covenant-lite loans. We find that borrowers trade-off increased covenants and lower interest rates from regulated banks, with covenant-lite loans and higher rates from non-banks. This non-price competition alters market structure: less covenant-sensitive borrowers remain with regulated lenders, and financially weaker borrowers switch to shadow banks or leave the leveraged lending market. As a result, banks' market share declines. Our findings on borrower behavior and loan terms align with a stylized equilibrium model.
Presentations: ABFER 2023*, Regulating Financial Markets Conference* (Frankfurt am Main, 2022), SFS Cavalcade North America 2022*, AFA 2021 (Chicago)*, EFA 2020 (Helsinki), MFA 2020 (Chicago)*, 8th Empirical Financial Intermediation (EFI) Workshop (2019)*, Federal Reserve Bank of Atlanta (2018)*, Central Bank of Ireland (2018), Emory (2018)*, GeorgiaTech (2018)*, U of Lausanne (2018)
Overallocated Investors and Secondary Transactions with Aleksandar Andonov
We study how portfolio rebalancing needs drive secondary transactions of illiquid stakes in private equity (PE) partnerships. To identify secondary sales of limited partner (LP) interests, we use the return reporting patterns of public investors for funds underlying their portfolio. We find that pensions overallocated in PE tend to sell their stakes in the secondary market, rather than increasing their target allocation or reducing the number of new commitments. The evidence from the distribution of discounts highlights the costs of this denominator effect due to self-imposed portfolio rebalancing policies at public plans.
Work in progress
The Economics of Venture Capital Funds with Will Gornall and Ilya Strebulaev
Competition for Talent: The Impact of Venture Capital Flows on Incumbent Firms by Linghang Zeng (Babson College), KWC Conference on Entrepreneurial Finance
Board Dynamics over the Startup Life Cycle by Michael Ewens (Caltech) and Nadya Malenko (Michigan Ross), FIRS
Corporate Venture Capital and Firm Scope by Yifei Zhang (Toulouse School of Economics), MFA
Race, Discrimination, and Hedge Funds by Yan Lu (U of Central Florida), Narayan Naik (LBS), and Melvyn Teo (SMU Singapore), Annual Hedge Fund Conference
Size, returns and value added: Do private equity firms allocate capital according to manager skill? by Reiner Braun (TUM), Nils Dorau (TUM), Tim Jenkinson (U of Oxford), and Daniel Urban (Erasmus) , Columbia Private Equity Conference
Funding Black High-Growth Startups by Lisa Cook (Board), Matt Marx (Cornell), Emmanuel Yimfor (U of Michigan), MFA
Initial Public Offerings and Product Market Dynamics: New Perspectives from the Nielsen Retail Scanner Data by Xi Chen (U of Houston), Jingxuan Zhang (Boston College), MFA
How Venture Capitalists and Startups Bet on Each Other: Evidence From an Experimental System by Mehran Ebrahimian (SSE) and Ye Zhang (SSE), WFA
Conflicting Fiduciary Duties and Fire Sales of VC-backed Start-ups by Bo Bian (UBC), Casimiro Nigro (Goethe University), and Yingxiang Li (UBC), EFA