Corporate Governance

• Dual-Class IPOs: A Solution to Unicorn Governance Failure,  forthcoming in the Handbook on the Structure of Private Equity and Venture Capital (edited by Brian Broughman and Elisabeth De Fontenay) 

Summary: The availability of dual-class IPOs mitigates the tail risk of agency costs in private firms by giving founders who wish to maintain control greater incentives to go public and subject their business model to market scrutiny

Coverage: ECGI Blog, and Columbia Blue Sky Blog

• The Rise of Dual-Class IPOs, Journal of Financial Economics 144, no. 1 (2022): 122-153  (with D. Aggarwal, Y. Hochberg & L. Litov)

Summary: The increase in founder-controlled dual-class firms over time is due to greater availability of private capital and technological shocks that reduced firms’ needs for external financing

Coverage: Bloomberg’s Money Stuff, Financial Times, Columbia Blue Sky Blog, Oxford Business Law Blog, and JD Supra

• The Rise of Anti-Activist Poison Pills, Working Paper (2022) (with T. Kirmse & M. Wittry)

Summary: Poison pills have changed from an anti-takeover device to a defensive tactic against the threat of hedge fund activism by employing lower trigger ownership thresholds and aggregating the holdings of hedge funds that act in concert

• Crisis Poison Pills, Review of Corporate Finance Studies 10, no. 1 (2021): 204-251 (with M. Wittry)

Summary: Firms adopt poison pills in crisis conditions, and in the 2020 stock market crash, the market reacted positively to poison pill adoptions by firms in industries that were vulnerable to the crisis 

Coverage: Institutional Investor, Bloomberg’s Money Stuff, Harvard Law School Forum on Corporate Governance and Financial Regulation, and RCFS Paper Spotlight

• Common Ownership Directors, Working Paper (2022) (with Y. Nili and J. Pinnington)

Summary: Firms in the same industry are more likely to have a common director if they have more common owners, but these common owners tend to be active concentrated investors and not large diversified institutional investors

• Common Venture Capital Investors and Start-up Growth, The Review of Financial Studies 37(2) (2024): 549-590 (with J. Grennan)

Summary: Despite the potential for rent-extraction, startups with common VC investors that share a common director raise more capital from VCs, are less likely to fail, and are more likely to exit through IPOs or acquisitions by another commonly-held startup

Coverage: Harvard Law School Forum on Corporate Governance and Financial Regulation 

• Common Ownership and Entrepreneurship, AEA Papers and Proceedings 111 (2021): pp. 582-86 (with J. Grennan)

Summary: Common ownership of startups by venture capital firms may have the effect of disrupting dormant industries where larger firms have limited incentives to compete

• Regulatory Competition and the Market for Corporate Law, American Economic Journal: Microeconomics 12, no. 2 (2020): 60-98 (with L. Magnolfi)

Summary: Despite inertia in incorporation decisions, Delaware would lose a significant market share of incorporations of large public firms with high institutional holdings if it adopted laws that protect managers, such as anti-takeover statutes

Coverage: Harvard Law School Forum on Corporate Governance and Financial Regulation

• Can Lax Corporate Law Increase Shareholder Value? Evidence from Nevada, Journal of Law & Economics 61, no. 4 (2018): 555-605

Summary: Nevada corporate law does not harm shareholder value for the small firms with high insider ownership that self-select into Nevada, and it may in fact enhance the value of these firms by reducing the costs of litigations and screening takeovers  

Stanford Journal of Law, Business and Finance 27, no. 1 (2022): 1-93 

Summary: A review of the intuition for key empirical strategies for evaluating the relationship between governance and shareholder value, and a guide for lawyers that explains how they can evaluate these studies and engage with their weaknesses

Coverage: Columbia Blue Sky Blog, the Oxford Business Law Blog and the Empirical Legal Studies Blog