2.6MSEK awarded to House of Innovation researchers
Roxana Turturea (Assistant Professor), Mattias Nordqvist (SEB Chair in Entrepreneurship and Family Business), and Krystal Zhao-Jansson (Ph.D. student) at the House of Innovation, Stockholm School of Economics, have received a 2.6MSEK grant from the Lars Erik Lundberg Foundation for Research and Education for their research project "Governance in Venture Capital-Backed Tech Start-Ups".
Over the last few years, we have witnessed a significant upsurge in the interest to invest in the so called private financial markets, that is, direct investments in companies, including start-ups, outside the public financial (stock) markets. Many of these investments were conducted by venture capital (VC) firms. The venture capital industry has not only grown substantially during this period, but also changed its key practices. With an increasing amount of capital looking to be invested in privately held new ventures, and with an increasing heterogeneity among VC firms, naturally questions arise regarding how VC-backed start-ups should be governed to secure the interests of all stakeholders.
This project will examine the role of governance in venture capital-backed start-ups. Such ventures tend to have high growth-ambitions, they engage extensively in innovation, and employ complex governance mechanisms.
This project aims to primarily contribute to entrepreneurship research by enhancing our scholarly understanding of governance in VC-funded tech start-ups. The team also intends to advance understanding of how governance shapes market and non-market strategy, and the implications for financial and non-financial performance.
From a practical stand, this research project intends to produce new knowledge that can help start-ups and VC firms to design mechanisms that help them establish an effective governance that is adapted to their goals. Given that there might be divergent goals between a start-up and a VC company, we also expect this research to provide knowledge that can help managers, advisors, board members and entrepreneurs to find a good balance that supports effective board work.