A study of the correlation between pre-IPO venture funds and founder characteristics with high-tech firm growth

High-tech firms are among the fastest growing in the United States. The four industries with the most rapid growth -internet, software, semiconductors, and technology hardware - have almost doubled their share of industry output in the United States over the last decade. These firms are not only an important stimulus to the national economy but also have spawned new industries and spearheaded the development of innovative products and services. It is for these reasons that these firms are of particular interests to managers, investors, and academics. By examining these firms, researchers can help managers, investors, and academics better understand the attributes associated with firm growth. The purpose of this study was to determine whether any correlations existed between the size of the pre-IPO (initial public offering) venture fund and founder characteristics with firm growth. Twenty different high-tech firms were studied. These firms were divided into two different samples. One sample consisted of 10 firms that went public well before the 2000 recession and the other sample consisted of 10 firms that went public close to the 2000 recession. A 5 year time period beyond an IPO was used for calculating the firm's average growth rate. The results showed a negative correlation between the size of the pre-IPO venture funds and firm growth. No significant correlation between founder age and prior entrepreneurial experience of the founder with firm growth was found.

Department dc:contributor.department

System Design and Management Program.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2008

Author dc:creator

• Zaheer, Safwan

Advisor dc:contributor.advisor

• Maria C. Yang.

• System Design and Management Program.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/47874

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/47874