The influence of media coverage on venture capital performance and evaluation: Evidence from post-IPO media coverage of portfolio startups and the venture capital firm’s subsequent fundraising
Kim, Hyunsun
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https://hdl.handle.net/2142/110694
Description
Title
The influence of media coverage on venture capital performance and evaluation: Evidence from post-IPO media coverage of portfolio startups and the venture capital firm’s subsequent fundraising
Author(s)
Kim, Hyunsun
Issue Date
2021-04-21
Director of Research (if dissertation) or Advisor (if thesis)
Love, E. Geoffrey
Doctoral Committee Chair(s)
Love, E. Geoffrey
Committee Member(s)
Kraatz, Matthew S.
Bednar, Michael K.
Schijven, Mario
Lammers, John C.
Department of Study
Business Administration
Discipline
Business Administration
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
Ph.D.
Degree Level
Dissertation
Keyword(s)
Entrepreneurship
media effects
venture capital
startups
Abstract
Management scholars have long been interested in the socio-cognitive perspective of organizational evaluation. This approach is of particular value in entrepreneurship, where strictly analytical and economic tools are insufficient in making resource allocation decisions. I apply this approach to examine whether and how VC firms derive benefit from their associations with startups that they invested in the past. I suggest a unique role of the media through which it enhances the accessibility of VC firms perceptually associated with the media-spotlighted startup protégés and so enhances those firms’ performance. In doing so, I model an inverse and reciprocal influence of association (i.e., one that flows from protégé to endorser) that has not been explored in prior research. The empirical setting is the U.S. VC industry from the years 1980 to 2018. My methodology is also distinct in that it used big data strategies to construct and validate a dataset of roughly 700,000 newspaper articles identified at the organization level covering 2,176 VC firms and 2,301 startups that successfully went through IPO exits. My results support the main prediction that association with protégé’s that gain high media coverage enhances VC firm performance. I discuss implications and further research questions raised by the dissertation.
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