Seminar Series

2023 - 2024

Speaker: Thomas Hellmann (U of Oxford).

Title: “Tolerating Losses for Growth:

How US Venture Capitalists Invest Abroad” .

joint with Alexander Montag (U of Indiana) and Joacim Tåg (IFN and Hanken).

Date: Thursday, January 11th at 12h30 (Paris Time).

Abstract: Startups face a tradeoff between short-term profitability versus long-term growth, where pursuing more ambitious growth strategies requires investors willing to tolerate prolonged financial losses. In this paper we first develop a theory of optimal loss tolerance, and then empirically test it by examining the cash flows of venture capital backed startups. The theory predicts that investors facing better exit opportunities have a higher optimal loss tolerance, which in turn encourages startups to pursue more ambitious growth strategies. We examine detailed financial data from Swedish venture capital backed startups and perform a difference-in-difference analysis that compares US venture capital backed companies with a control group of non-US venture capital backed companies. We find that US backed companies have ‘deeper’ J-curves, meaning that they incur greater losses in the short term, but achieve better long-term outcomes. Among other things, they achieve a higher rate of successful exits, without any increase in the failure rate.  

Here is, a link to the speaker’s and the FEELab website:

https://www.sbs.ox.ac.uk/about-us/people/thomas-hellmann 

https://sites.google.com/view/feelabtbs/

You are cordially invited to participate in the seminar, which will take place in Room 321, Lascrosses building 

For more information, please contact: Pierre Mella-Barral p.mella-barral@tbs-education.fr