Paul P. Momtaz

• Doctor of Philosophy
• University of California, Los Angeles

Not for quotation, comments welcome. Abstract We examine how information cascades influence voting behavior and market performance in decentralized autonomous organizations (DAOs). Building on cascade and signaling theory, we argue that early voters and influential tokenholders disproportionately shape subsequent community decisions, especially in...

After initial coin offerings (ICOs), decentralized digital platforms (DDPs) decide whether to go public or remain private. We explore the implications of the public-versus-private decision for the growth and decentralization of DDPs. Employing a difference-indifferences framework, we find that public DDPs scale faster post-listing relative to match...

We explore the role of sustainability signaling in the market for entrepreneurial labor. Using email communication data from AngelList, we quantify the strength of environmental, social, and governance (ESG) signals from the labor demand (entrepreneurial firms) and supply (en-trepreneurial talent) sides. We conceptualize the entrepreneurial labor m...

After initial coin offerings (ICOs), decentralized digital platforms (DDPs) decide whether to go public or remain private. We explore the implications of the public-versus-private decision for the growth and decentralization of DDPs. Employing a difference-indifferences framework, we find that public DDPs scale faster post-listing relative to match...

Decentralized autonomous organizations (DAOs) use proceeds from crowdfunding in various projects. The decentralization feature of DAOs submits that decision-making is a collective democratic action of all DAO members. The autonomy feature of DAOs suggests that decision-making is an algorithmic process governed by self-executing smart contracts. How...

Plain English Summary Sustainability practices enhance the financial performance of small and medium-sized enterprises (SMEs) in Spain. We gathered data from 2012 to 2022 using Internet Archive tools to investigate the impact of new environmental, social, and governance (ESG) information on SMEs’ financial performance. ESG information can come from...

The role of violent conflict for entrepreneurial activity is relatively underexplored and controversial in the entrepreneurship literature. Drawing on institutional theory, a country's level of conflict should reduce individuals' propensities to engage in entrepreneurship and shift the relative share of activity from opportunity to necessity entrep...

This article examines the operating and financial performance of venture firms conducting initial coin offerings (ICOs) with different types of investors and at different points along a venture’s life-cycle. Relative to purely crowdfunded ICO ventures, institutional investor-backed ICO ventures exhibit weaker operating performance and fail earlier....

Plain English Summary The initial coin offerings (ICO) market has faced the issue of bad entrepreneurs and outright fraud since its infancy due to the high level of information asymmetry. We show that the share of tokens retained by the venture is valued as a quality signal by investors to identify good entrepreneurs, leading to an increased fundin...

Academic freedom is a critical norm of science. Despite the widely postulated importance of academic freedom, the literature attests to a dearth of research on the topic. Specifically, we know little about how academic freedom relates to indicators of societal progress, such as innovation. We address this research gap by empirically assessing the i...

This paper examines the efficiency of the Initial Coin Offering (ICO) market through a search-theoretical lens. Search intensity associated with the process of identifying valuable startups is increasing in market granularity. DLT increases market granularity because asset tokenization lowers entry barriers. Lower-end entrants, however, increase ag...

We propose a taxonomy of cybercrime on the Ethereum blockchain and examine how cybercrime impacts victims' risk-taking and returns. Our difference-indifferences analysis of a sample of victims and matched non-victims suggests that victims increase their long-term total risk-taking and earn lower risk-adjusted returns in the post-cybercrime period....

What role does the selection of an investor and the timing of financing play in initial coin offerings (ICOs)? We investigate the operating and financial performance of ventures conducting ICOs with different types of investors at different points in the ventures' life cycle. We find that, relative to purely crowdfunded ICO ventures, institutional...

Crypto Funds (CFs) represent a novel investor type in entrepreneurial finance. CFs intermediate Decentralized Finance (DeFi) markets by pooling contributions from crowd-investors and investing in tokenized startups, combining sophisticated venture-and hedge-style investment strategies. We compile a unique dataset combining token-based crowdfunding...

The first-ever article published in Research Policy was Casimir’s (1971) advocacy of academic freedom in light of the industry’s increasing influence on research in universities. Half a century later, the literature attests to the dearth of work on the role of academic freedom for innovation. To fill this gap, we employ instrumental variable techni...

This synthetic control study quantifies the economic costs of the Russo-Ukrainian war in terms of foregone entrepreneurial activity in both countries since the invasion of Crimea in 2014. Relative to its synthetic counterfactual, Ukraine’s number of self-employed dropped by 675,000, corresponding to a relative loss of 20%. The number of Ukrainian S...

The first-ever article published in Research Policy was Casimir’s (1971) advocacy of academic freedom in light of the industry’s increasing influence on research in universities. Half a century later, the literature attests to the dearth of work on the role of academic freedom for innovation. To fill this gap, we employ instrumental variable techni...

Sustainability orientation has a positive effect on startups' initial valuation and a negative effect on their post-funding financial performance. All else equal, improving sustainability orientation by one standard deviation increases startups' funding amount by 28 % and decreases investors' abnormal returns per post-funding year by 16 %. The resu...

Blockchain technology and smart contracts are catalysts for decentralization and disintermediation. These new technologies reduce transaction costs, agency costs, and offer a basis for trustless social and economic interactions. They are fueling new business models for decentralized platforms and have revolutionized crowdfunding. A recent trend, De...

Recent research finds that whether or not ventures publish video pitches during crowdfunding campaigns affects their funding success. Little is known, however, about how and why video pitches help startups achieve higher valuations. To close this gap, we analyze metrics and the content of video pitches published along blockchain-based crowdfunding...

Blockchain-based tokens are widely acknowledged as a new asset class. Tokens allow new ventures to raise financing from crowd-investors on public blockchains. The information stored on these public ledgers makes it possible to examine the crowd’s investment behavior, as well as the financial returns to individual investors in the cross-section of t...

The Metaverse refers to a shared vision among technology entrepreneurs of a three-dimensional virtual world, an embodied internet with humans and the physical world in it. As such, the Metaverse is thought to expand the domain of human activity by overcoming spatial, temporal, and resource-related constraints imposed by nature. The technological in...

This paper examines rent sharing in private investments in public equity (PIPEs) between newly public firms and private investors. The evidence suggests highly asymmetric rent sharing. Newly public firms earn a negative return of up to −15% in the first post-PIPE year, while investors benefit due to the ability to dictate transaction terms. The res...

New Venture Teams' (NVTs') collective emotions impact startup valuations through their intensity and diversity. I identify NVTs' affective traits with artificial emotional intelligence by tracking 2,520 individuals across 165 NVTs during their Initial Coin Offerings (ICOs). The level of NVTs' negative affects correlates with lower valuations, while...

This paper assesses the market effects of regulatory events associated with the implementation of a bail-in regime for failing European banks. The bail-in regime was designed to make banks efficiently resolvable in order to abolish Implicit Government Guarantees (IGGs). We use a seemingly-unrelated-regressions framework to estimate the effects on C...

How efficient is Decentralized Finance (DeFi)? To answer this question, we study the efficiency and the role of intermediation in a large DeFi segment, namely, the market for Initial Coin Offerings (ICOs). In particular, we advance a search-related theory of DeFi, in which search frictions partly offset the efficiency gains from reduced transaction...

The Metaverse refers to a shared vision among technology entrepreneurs of a three-dimensional virtual world, an embodied internet with humans and the physical world in it. As such, the Metaverse is thought to expand the domain of human activity by overcoming spatial, temporal, and resource-related constraints imposed by nature. The technological in...

Crypto Funds (CFs) represent a novel investor type in entrepreneurial finance. CFs intermediate Decentralized Finance (DeFi) markets by pooling contributions from crowd-investors and investing in tokenized startups, combining sophisticated venture-and hedge-style investment strategies. We compile a unique dataset combining token-based crowdfunding...

Blockchain technology and smart contracts are catalysts for decentralization anddisintermediation. These new technologies reduce transaction costs, agency, and offer a basis for trustless social and economic interactions. They are fueling new business models for de-centralized platforms and have revolutionized crowdfunding. A recent trend, Decentra...

This paper examines rent sharing in Private Investments in Public Equity (PIPEs) between newly public firms and private investors. The evidence suggests highly asymmetric rent sharing. Newly public firms earn a negative return of up to-15% in the first post-PIPE year, while investors benefit due to the ability to dictate transaction terms. The resu...

This paper introduces a machine learning approach to quantify altruism from the linguistic style of textual documents. We apply our method to a central question in (social) entrepreneurship: How does altruism impact entrepreneurial success? Specifically, we examine the effects of altruism on crowdfunding outcomes in Initial Coin Offerings (ICOs). T...

Research summary We apply insights from research in social psychology and labor economics to the domain of entrepreneurial finance and investigate how founder chief executive officers' (founder CEOs') facial attractiveness influences firm valuation. Leveraging the novel context of initial coin offerings (ICOs), we document a pronounced founder CEO...

This paper examines rent sharing in Private Investments in Public Equity (PIPEs) be-tween newly public firms and private investors. The evidence suggests highly asym-metric rent sharing. Newly public firms earn a negative return of up to –15% in the firstpost-PIPE year, while investors benefit due to the ability to dictate transaction terms.The res...

This paper examines rent sharing in Private Investments in Public Equity (PIPEs) between newly public firms and private investors. The evidence suggests highly asymmetric rent sharing. Newly public firms earn a negative return of up to -15% in the first post-PIPE year, while investors benefit due to the ability to dictate transaction terms. The res...

This paper examines rent sharing in Private Investments in Public Equity (PIPEs) between newly public firms and private investors. The evidence suggests highly asymmetric rent sharing. Newly public firms earn a negative return of up to -15% in the first post-PIPE year, while investors benefit due to the ability to dictate transaction terms. The res...

This paper assesses the market effects of regulatory events associated with the implementation ofa bail-in regime for failing European banks. The bail-in regime was designed to make banksefficiently resolvable in order to abolish Implicit Government Guarantees (IGGs). We use aseemingly-unrelated-regressions framework to estimate the effects on CDS...

This paper examines the role of intermediation for the efficiency of Decentralized Finance (DeFi)markets for startups, with an application to Initial Coin Offerings (ICOs). ICO intermediationis a contentious issue. Existing research fails to explain the trade-off between intermediatedand non-intermediated ICOs. To fill this gap, we advance a search...

How efficient is Decentralized Finance (DeFi)? To answer this question, we study the efficiencyand the role of intermediation in a large DeFi segment, namely, the market for Initial Coin Offer-ings (ICOs). In particular, we advance a search-related theory of DeFi, in which search frictionspartly offset the efficiency gains from reduced transaction...

How efficient is Decentralized Finance (DeFi)? To answer this question, we study the efficiency and the role of intermediation in a large DeFi segment, namely, the market for Initial Coin Offerings (ICOs). In particular, we advance a search-related theory of DeFi, in which search frictions partly offset the efficiency gains from reduced transaction...

New Venture Teams’ (NVTs’) collective emotions impact startup valuations through their intensity and diversity. I identify NVTs’ affective traits with artificial emotional intelligence by tracking 2,520 individuals across 165 NVTs during their Initial Coin Offerings (ICOs). The level of NVTs’ negative affects correlates with lower valuations, while...

Crypto funds (CFs) represent a novel investor type in entrepreneurial finance. CFs intermediate Decentralized Finance (DeFi) markets by pooling contributions from crowd-investors and investing in tokenized startups, combining venture- and hedge-style investment strategies. We compile a unique dataset combining token-based crowdfunding (Initial Coin...

We apply insights from research in social psychology and labor economics to the domain of entrepreneurial finance and investigate how founder chief executive officers’ (founder CEOs’) facial attractiveness influences firm valuation. Leveraging the novel context of initial coin offerings (ICOs), we document a pronounced founder CEO beauty premium, w...

A defining feature of initial coin offerings (ICOs) is that entrepreneurs bear the full marginal investment cost but profit only partially from the marginal investment payoff. This design may exacerbate agency conflicts inherent in corporate finance. As a consequence, signals of entrepreneurial quality such as CEO loyalty, which is an established c...

Because time is a key determinant of entrepreneurial decision making, time-to-event models are ubiquitous in entrepreneurship. Widespread econometric misconception, however, may cause complicated biases in existing studies. The reason is spurious duration dependency, a complicated form of endogeneity caused by unobserved heterogeneity, which is par...

The valuation of start-up firms is challenging, yet highly relevant for entrepreneurs and financiers alike. We reverse-engineer fair-value multiples by comparing the firm value at the time of financing with the firm value at the time of exit. Our framework produces reliable valuation multiples from observed venture capital transactions per industry...

This paper examines rent sharing in Private Investments in Public Equity (PIPEs) between newly public firms and private investors. The evidence suggests highly asymmetric rent sharing. Newly public firms earn a negative return of up to -15% in the first post-PIPE year, while investors benefit due to the ability to dictate transaction terms. The res...

This chapter synthesizes the economics, law, and technology of security tokens and Security Token Offerings (STOs). Security tokens are blockchain-based investment contracts that are subject to securities law. Interoperability, fractional ownership, market liquidity, and rapid settlement are among the main reasons why security tokens area primary c...

Sustainable Entrepreneurship (SE) targets profitability and sustainability goals. A major research gap concerns SE’s economic attractiveness for entrepreneurs and investors. The question is ambiguous because sustainability orientation creates costly constraints, while startups cannot fully appropriate their positive externalities. We relate startup...

Recent research finds that whether or not ventures publish video pitches during crowdfunding campaigns affects their funding success. Little is known, however, about how and why video pitches help startups achieve higher valuations. To close this gap, we analyze metrics and the content of video pitches published along blockchain-based crowdfunding...

Sustainable Entrepreneurship (SE) seeks to attain profitability and sustainability goals.A major research gap concerns the economic attractiveness of SE for entrepreneursand investors. The question is ambiguous because sustainability orientation createscostly constraints, while startups cannot fully appropriate their positive externalities.We relat...