Matthew Rhodes-Kropf
There are 2 articles for this faculty member.
About Faculty in this Article:
Matthew Rhodes-Kropf is an associate professor in the Entrepreneurial Management Unit at Harvard Business School.
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Investment Cycles and Startup Innovation
| Authors: | Ramana Nanda and Matthew Rhodes-Kropf |
|---|---|
| Published: | November 7, 2011 |
| Paper Release Date: | October 2011 |
| Feature: | Working Papers |
In this paper, HBS professors Nanda and Rhodes-Kropf examine how the environment in which a new venture was first funded relates to its ultimate outcome, by specifically looking at what happened to venture capital-backed startups funded between 1980 and 2004. Results show that firms that were funded in "hot" markets were more likely to fail but created more value and had more highly cited patents when they succeeded. These results suggest that that flood of capital in hot markets lowers the cost of experimentation for early stage investors, and therefore allows them to fund more novel projects in periods of heated financial activity.
Published in 2010
Financing Risk and Bubbles of Innovation
| Authors: | Ramana Nanda and Matthew Rhodes-Kropf |
|---|---|
| Published: | October 20, 2010 |
| Paper Release Date: | August 2010 |
| Feature: | Working Papers |
While start-up firms are key to any technological revolution, they also run a high risk of failure. To that end, investors often provide limited capital in several careful stages, gaining confidence in a firm before doling out another round of funding. However, these investors still face the possibility that other investors won't provide follow-on funding, even when the firm's prospects remain sound. That's a big risk for individual investors who can't afford to fund a new firm all by themselves, and whose investment will flounder if others don't invest, too. Research by HBS professors Ramana Nanda and Matthew Rhodes-Kropf explores why future investors may not fund the project at its next stage even if the fundamentals of the project have not changed.
