November 2009

In with the “In” Crowd
Like the cool kids in high school who discourage those who “don’t belong” from encroaching on their turf, Yael Hochberg notes that venture capitalists in tightly networked geographic markets deter new entrants using some of the same behaviors exhibited in high school hallways.

Yael Hochberg

Alexander Ljungqvist

Yang Lu

May 2008

Lobbyists Speak in Numbers
Although the Sarbanes-Oxley Act has come to be known as SOX, it has nothing to do with baseball teams or fancy foot coverings. Like sports teams, however, the law spurs heated debates because it addresses a hot-button topic: corporate accountability. Since SOX was passed in 2002, people have argued whether or not it will indeed improve operations, decrease corporate mismanagement, and thus benefit shareholders. Some insist it will prove detrimental because of high compliance costs and be ineffective in preventing corporate misconduct, and that it will drive companies to list on foreign exchanges.

Yael Hochberg

Paola Sapienza

Annette Vissing-Jørgensen

May 2007

Whom You Know Matters
Venture capitalists often acknowledge the critical role of network relationships in the success of individual VC firms, particularly in sourcing investment opportunities, management talent, and information necessary for consistent industry success. One prominent VC, Kleiner Perkins Caufield and Byers, even goes so far as to refer to itself as a “Venture Keiretsu.” Research by Yael Hochberg (Finance Department, Kellogg School of Management) and her colleagues Alexander Ljungqvist and Yang Lu (Stern School of Business, NYU) suggests that VC networks—in particular, relationships with other VC firms—can have a significant positive impact on fund performance.

Yael Hochberg

Alexander Ljungqvist

Yang Lu