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Sophie Pommet and Jean-François Sattin
''CEO human capital and venture capital investment duration: Evidence from French IPOs''
( 2019, Vol. 39 No.4 )
The duration of the VC incubation period is an important parameter for the profitability of venture capital (VC) firms. This paper uses a new database of VC-backed initial public offerings (IPOs) that are listed on French financial markets in order to highlight the importance of chief executive officer (CEO) human capital on the duration of the VC incubation period prior to the IPO. By using a duration model (Weibull model) we find that while CEOs' previous academic, technical and managerial experiences seem not to affect the timing of an IPO, the CEOs' entrepreneurial background is strongly negatively correlated to the duration of VC investment (it increases the hazard ratio by more than 100%) and thus fosters IPO exit.
Keywords: venture capital, human capital, CEO, IPO
JEL: G2 - Financial Institutions and Services: General
E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
Manuscript Received : Jul 17 2018 Manuscript Accepted : Oct 13 2019

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