Mutual Funds as Venture Capitalists? Evidence from Unicorns /
Chernenko, Sergey.
Mutual Funds as Venture Capitalists? Evidence from Unicorns / Sergey Chernenko, Josh Lerner, Yao Zeng. - Cambridge, Mass. National Bureau of Economic Research 2017. - 1 online resource: illustrations (black and white); - NBER working paper series no. w23981 . - Working Paper Series (National Bureau of Economic Research) no. w23981. .
October 2017.
Using novel contract-level data, we study the recent trend in open-end mutual funds investing in unicorns--highly valued, privately held start-ups--and the consequences of these investments for corporate governance provisions. Larger funds and those with more stable funding are more likely to invest in unicorns. Compared to venture capital groups (VCs), mutual funds have weaker cash flow rights and are less involved in terms of corporate governance, being particularly underrepresented on boards of directors. Having to carefully manage their own liquidity pushes mutual funds to require stronger redemption rights, suggesting contractual choices consistent with mutual funds' short-term capital sources.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
Mutual Funds as Venture Capitalists? Evidence from Unicorns / Sergey Chernenko, Josh Lerner, Yao Zeng. - Cambridge, Mass. National Bureau of Economic Research 2017. - 1 online resource: illustrations (black and white); - NBER working paper series no. w23981 . - Working Paper Series (National Bureau of Economic Research) no. w23981. .
October 2017.
Using novel contract-level data, we study the recent trend in open-end mutual funds investing in unicorns--highly valued, privately held start-ups--and the consequences of these investments for corporate governance provisions. Larger funds and those with more stable funding are more likely to invest in unicorns. Compared to venture capital groups (VCs), mutual funds have weaker cash flow rights and are less involved in terms of corporate governance, being particularly underrepresented on boards of directors. Having to carefully manage their own liquidity pushes mutual funds to require stronger redemption rights, suggesting contractual choices consistent with mutual funds' short-term capital sources.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.