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New research on business ventures from Harvard Business School faculty on issues including lifecycle, structure, founder agreements, partnership agreements and the family business.
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Dog Eat Dog: Measuring Network Effects Using a Digital Platform Merger

by Chiara Farronato, Jessica Fong, and Andrey Fradkin

With heated debate over antitrust regulation of online platforms, this study finds that when a larger platform acquired its greatest competitor, users were not better off with a single platform compared with two competitors, despite marked efficiency improvements experienced by the acquiring platform.

Biased Sampling of Early Users and the Direction of Startup Innovation

by Ruiqing Cao, Rembrand Koning, and Ramana Nanda

New ventures catering to female customers should be aware that the underrepresentation of women among early users on digital platforms can reduce the venture’s growth and chances of survival. As a result of gaining fewer early users, these ventures reduce future product development and are less likely to raise VC funding.

COVID Not Slowing VC Investment

by Danielle Kost

Despite the economic uncertainty, most venture capitalists expect their investments to outperform major equity indexes and are still funding new endeavors, says Paul Gompers. Open for comment; Comment(s) posted.

Short-Termism, Shareholder Payouts, and Investment in the EU

by Jesse M. Fried and Charles C.Y. Wang

Shareholder-driven “short-termism,” as evidenced by increasing payouts to shareholders, is said to impede long-term investment in EU public firms. But a deep dive into the data reveals a different story.

Does Venture Capital Attract Human Capital? Evidence from a Randomized Field Experiment

by Shai Bernstein, Kunal Mehta, and Richard Townsend

Using a randomized field experiment conducted on a large online search platform, this study illustrates how investments by top venture capital investors attract potential employees and improve the pool of candidates available for the startup.

Recessions Push Some Entrepreneurs to Launch Too Soon

by Sean Silverthorne

Research by Maria Roche looks at how past economic downturns forced job-insecure, high-tech entrepreneurs to rush their ventures to market. Will COVID-19 do the same? Open for comment; Comment(s) posted.

The Targeting and Impact of Paycheck Protection Program Loans to Small Businesses

by Alexander Bartik, Zoë B. Cullen, Edward L. Glaeser, Michael Luca, Christopher Stanton, and Adi Sunderam

Survey data on business owners collected by the Alignable network shows that lending to bank customers in better financial positions may have been prioritized, possibly crowding out less connected firms that would have benefitted more from the loans.

How to Help Small Businesses Survive COVID's Next Phase

by Danielle Kost

For small businesses that have survived the coronavirus so far, what's next? Karen Mills outlines steps that business owners and government should take immediately. Open for comment; Comment(s) posted.

Entrepreneurs (Co-) Working in Close Proximity: Impacts on Technology Adoption and Startup Performance Outcomes

by Maria P. Roche, Alexander Oettl, and Christian Catalini

In one of the largest entrepreneurial co-working spaces in the United States, startups are influenced by peer startups within a distance of 20 meters. The associated advantages for learning and innovation could be lost using at-a-distance work arrangements.

Weak Credit Covenants

by Victoria Ivashina and Boris Vallée

Prior to the 2020 pandemic, the leveraged loan market experienced an unprecedented boom, which came hand in hand with significant changes in contracting terms. This study presents large-sample evidence of what constitutes contractual weakness from the creditors’ perspective.

Who Guarantees Your Workplace Is Safe for Return?

by John Macomber and Joseph Allen

Building health is today a top priority for owners and tenants, but how do we know our offices are safe to re-enter? John Macomber and Joseph Allen offer best practices. Open for comment; Comment(s) posted.

Coronavirus Could Create a 'Bankruptcy Pandemic'

by Dina Gerdeman

An expected explosion in bankruptcy proceedings over the coming months could overwhelm the courts, says Stuart Gilson. Open for comment; Comment(s) posted.

How Are Small Businesses Adjusting to COVID-19? Early Evidence From a Survey

by Alexander Bartik, Marianne Bertrand, Zoë B. Cullen, Edward L. Glaeser, Michael Luca, and Christopher Stanton

This survey of 5,819 small businesses in the United States shows that the pandemic has already caused massive dislocation among small businesses. Many businesses think they will not be able to survive if the crisis persists for the coming months. The immediacy of new funding will likely impact medium-term outcomes.

Small Businesses Are Worse Off Than We Thought

by Kristen Senz

A survey of small-business owners shows that lack of liquidity and skepticism of government programs are compounding COVID crisis recovery efforts. Open for comment; Comment(s) posted.

Free Riding in Loan Approvals: Evidence From SME Lending in Peru

by Irani Arraiz, Miriam Bruhn, Benjamin N. Roth, Claudia Ruiz-Ortega, and Rodolfo Stucchi

Using data from a large Peruvian bank trying to expand credit access to small and medium enterprises, this study shows that competing lenders use one another’s loan approvals as an input into their own approval process. Such “free riding” has great impact on market outcomes and might warrant policy intervention.

How Small Businesses Can Survive the Coronavirus Outbreak

by Danielle Kost

COVID-19 will put many small businesses on life support. Karen G. Mills, who has been advising policymakers on aid options, offers guidance to owners on the brink of ruin. Open for comment; Comment(s) posted.

Do Private Equity Buyouts Get a Bad Rap?

by Michael Blanding

Elizabeth Warren calls private equity buyouts "Wall Street looting," but a recent study by Josh Lerner and colleagues shows they have both positive and negative impacts. Open for comment; Comment(s) posted.

The Economic Effects of Private Equity Buyouts

by Steven J. Davis, John Haltiwanger, Kyle Handley, Ben Lipsius, Josh Lerner, and Javier Miranda

Private equity buyouts are a major financial enterprise that critics see as dominated by rent-seeking activities with little in the way of societal benefits. This study of 6,000 US buyouts between 1980 and 2013 finds that the real side effects of buyouts on target firms and their workers vary greatly by deal type and market conditions.

Goldman Sachs’ $500 Million Bet on Small Businesses

Launched during the financial crisis in 2009, the Goldman Sachs 10,000 Small Businesses Program provided free business education, support, and access to capital for small businesses, graduating 7,300 participants. Len Schlesinger discusses the program's impact. Open for comment; Comment(s) posted.

The Value Potential of New Business Models

by David J. Collis

A business model determines the opportunity’s value creation potential and suggests how the resulting value might be distributed among participants pursuing that model. Strategists need to understand the interaction of elements of the job to be done and asset configuration in order to create differing strategic prescriptions.