Melbourne Accounting Research Seminar - Professor George Foster

Professor George Foster from Stanford University presented a MARS seminar.

Topic: Venture capital financing and the growth of startup firms

Abstract: This study examines the association between the presence of venture capital (VC) and the employee growth of startups. Grounded in signaling theory, it investigates the impact, if any, of the VC financing events upon the growth of these companies and whether the amount of funding affects the intensity of the signal. It further explores whether VC leads to growth or, alternatively, whether growth signals the need for VC. Finally, it documents the relationship between growth in startup financial valuation and changes in the number of employees of successive rounds of financing.