Diego D'Adda

The Impact of Venture Capital Monitoring in Europe

In this paper we aim to empirically test the monitoring effect of Venture Capital financing on portfolio companies. Following Bernstein et al. (2015), we exploit the introduction of a new airline route between investor and investee locations as an exogenous shock lowering the cost of monitoring activities performed by a venture capitalist. Using a sample of 9,564 investments by lead VC investors in Europe, we test how this treatment affects portfolio companies’ performances in terms of the likelihood of being listed or acquired, the number of patents, the number of employees and the amount of sales. Our results show that VC monitoring has a positive and economically relevant effect on European portfolio companies along most of these performance measures, but with different time horizons.

Bank-Affiliated Venture Capital and the Financial Distress Risk of Portfolio Firms

We analyze a sample of European high-tech entrepreneurial firms that received bank venture capital (BVC) financing between 1994 and 2004. We employ a “two-step” matching procedure in order to build a control group composed of i) comparable firms that received venture capital financing from independent investors (IVCs) and ii) comparable non-invested firms. Our econometric analyses suggest that, on the one hand, BVC investors are more risk adverse than other typologies of investors and are more interested to the risk profile of the firms in which they invest. In fact, before the first round of financing, BVC-backed firms show a lower risk of financial distress, both compared to IVC-backed firms and non-invested matched firms. On the other hand, in line with the relationship banking and the VC signaling theories, we find that, after the investment, BVC-backed firms exhibit a significant increase in debt exposure, compared to non-invested firms.

La delega dell'autorità decisionale nelle acquisizioni di NTBF: l'impatto sull'innovazione

The paper considers the acquisition of a high-tech start-up and analyzes how the allocation of innovation decision-making powers has an impact on the post-acquisition innovation activity of the target firm. These powers may be delegated to the key inventors of the acquired firm or centralized by the acquiring firm. The authors develop a theoretical model that integrates the insights offered by the competence- and resource-based views into a framework based on recent developments in delegation theory. The model leads to testable predictions related to the moderating effect of several factors on the relationship between the delegation (or centralization) of decisions and the post-acquisition innovation performance. Specifically, we consider the following factors: i) the reasons behind the acquisition (explorative vs. exploitative); ii) the technological connection between the acquiring and the acquired firms; and iii) the nature of the buyer’s previous acquisition experience. The model has relevant normative implications for the management of the buyer firm relating to the post-acquisition reorganization of the start-up.