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 the financing of startup companies.
I teach Financial Management & Policies, and Entrepreneurial Finance & Private Equity in the MBA curriculum.
The Impact of Venture Capital Screening [ SSRN ]
While existing studies confirm venture capitalists’ monitoring ability, evidence of their screening ability remains scarce. This paper exploits a unique empirical setting to show that busy and potentially distracted venture capitalists (VCs) make inferior quality investments. To confirm VCs’ screening ability, I exploit 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: startups added to a VC’s portfolio during her IPO engagement period are 9% less likely to go public or become acquired, and they have 19% lower exit multiples. The effects are stronger in cases of higher IPO workload intensity and higher information asymmetry. These results speak to the importance of pre-investment screening for generating venture capital returns.
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
Do Banks Compete on Non-Price Terms? Evidence from Loan Covenants [ SSRN ] with Christoph Herpfer and Roberto Steri
We investigate the link between competition in credit markets and non-price loan terms, specifically financial covenants. We exploit regulation in the leveraged loan market as variation in banks' ability to offer covenant-lite loans. As regulated banks demand relatively more covenants, borrowers switch to unregulated lenders, or shadow banks, leading to a decline in aggregate banks' market share. Results are not driven by lower loan supply or changes in other loan terms, and reflect a relation between lax covenants and loan growth in the broader lending market. Our findings encourage regulators to internalize non-price competition between regulated and unregulated sectors.
Presentations: 2022 Regulating Financial Markets Conference* (Frankfurt am Main), 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)
The Value of Privacy and the Choice of Limited Partners by Venture Capitalists [ SSRN ] with Will Gornall and Ilya Strebulaev
We document how information disclosure concerns shape the choice of limited partners by venture capital firms. Late-2002 court rulings forced public pension plans and public university endowments to disclose fund performance information. The most successful, and typically oversubscribed, venture capital firms responded by excluding public institutions from their new funds, replacing them with domestic nonpublic and foreign investors. Public investors reallocated to less successful and younger VC firms, while some of the affected limited partners agreed to limit the scope of disclosure from VC firms. We find no evidence that these changes were driven by the unwillingness to disclose poor technology bubble returns.
Presentations: MFA (2023, scheduled), IPC Spring Research Symposium (2023, scheduled), Commonwealth Finance Workshop 2022, EFA 2022 (Barcelona), PERC Private Equity Research Symposium (Oxford, 2022), Stanford PhD Seminar (2020)
Media coverage: The FinReg Blog
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)
Board Dynamics over the Startup Life Cycle by Michael Ewens (Caltech) and Nadya Malenko (Michigan Ross)
Corporate Venture Capital and Firm Scope by Yifei Zhang (Toulouse School of Economics)