Yael Hochberg

Rice University · Faculty of Finance

We examine the effect of the introduction of ridehailing in US cities on fatal traffic accidents. The arrival of ridehailing is associated with an approximately 3% increase in the number of fatal accidents, for both vehicle occupants and pedestrians. Consistent with ridehailing increasing road usage, we find that its introduction is associated with...

We utilize the staggered arrival of Uber and Lyft—large sources of on-demand, platform-enabled gig opportunities—in U.S. cities to examine the effect of the arrival of flexible gig work opportunities on new business formation. The introduction of gig opportunities is associated with an increase of ∼5% in the number of new business registrations in...

We create a novel dataset to examine the recent rise in dual-class IPOs. We document that dual-class firms have different types of controlling shareholders and wedges between voting and economic rights, and that the increasing popularity of dual-class structures is driven by founder-controlled firms. We find that founders’ wedge is greater when fou...

Politics may color interpretations of facts, and thus perceptions of risk. We find that a higher share of Trump voters in a county is associated with lower perceptions of risk during the COVID-19 pandemic. Controlling for COVID-19 case counts and deaths, as Trump's vote share rises in the local area, individuals search less for information on the v...

Using mobile phone and survey data, we show that during the early phases of COVID-19, voluntary social distancing was greater in areas with higher civic capital and amongst individuals exhibiting a higher sense of civic duty. This effect is robust to including controls for political ideology, income, age, education, and other local-level characteri...

Accelerator programs are an increasingly important part of entrepreneurial ecosystems. While accelerators have core defining features—fixed-term, cohort-based educational and mentorship programs for startups— there is also significant variation amongst them. In this paper, we relate key variation in the antecedents, organizational design and operat...

Representation on pension fund boards by state officials—often determined by statute decades past—is negatively related to the performance of private equity investments made by the pension fund, despite state officials’ relatively strong financial education and experience. Their underperformance appears to be partly driven by poor investment decisi...

We examine commercial real estate fund managers’ abilities to generate abnormal profits through selection of outperforming property submarket segments or through the timing of entry into and exit from submarkets. The vast majority of portfolio managers exhibit little market timing ability, with the exception of non-NYSE real estate investment trust...

Practical advice abounds in a faculty-focused guide to commercializing research

Recent years have seen the emergence of a new institutional form in the entrepreneurial ecosystem: the seed accelerator. These fixed- term, cohort- based “boot camps” for start-ups offer educational and mentorship programs for start-up founders, exposing them to a wide variety of mentors, including former entrepreneurs, venture capitalists (VCs), a...

Young science and technology companies are often rich in intangibles but lack physical assets and cash flows required to secure a loan. Intangibles, such as patents, are effectively “unbankable” for traditional lenders because of international banking regulations. Intangibles also are often

![Figure][1] ILLUSTRATION: DAVIDE BONAZZI A new institutional form has emerged in the entrepreneurial ecosystem in recent years: the seed accelerator. These fixed-term cohort-based “boot camps” for startups offer education and mentorship for startup founders and culminate in a “demo

Ties between similar partners in economic and financial networks are often attributed to concerns about agency costs. In this paper, we distinguish the underlying motives for tie formation between sets of potential partners in the network, thus informing the relative importance of agency cost and resource accumulation in tie formation across firms....

An important type of product differentiation in the venture capital (VC) market is industry specialization. We estimate a market structure model to assess competition among VCs—some of which specialize in a particular industry and others of which are generalists—and find that the incremental effect of additional same-type competitors increases as t...

We explore the market for lending to startups and two mechanisms that may facilitate trade within it: (1) ‘salability’ of patent collateral; and (2) credible commitment of equity investors. Intensified trading in the secondary patent market is strongly related to lending, particularly for startups with more redeployable patent assets. Utilizing the...

PLEASE CITE THE UPDATED, PUBLISHED VERSION: Cohen S, Fehder DC, Hochberg YV, Murray F. 2019. The design of startup accelerators. Research Policy : S0048733319300939. https://www.sciencedirect.com/science/article/abs/pii/S0048733319300939 We examine and discuss the seed accelerator phenomenon which has recently received much attention both in the...

Recent years have seen the rapid emergence of a new type of program aimed at seeding startup companies. These programs, often referred to as accelerators, differ from previously known seed-stage institutions such as incubators and angel groups. While proliferation of such accelerators is evident, evidence on efficacy and role of these programs is s...

The use of debt to finance risky entrepreneurial-firm projects is rife with informational and contracting problems. Nonetheless, we document widespread lending to startups in three innovation-intensive sectors and in early stages of development. At odds with claims that the secondary patent market is too illiquid to shape debt financing, we find th...

Why don’t VCs eliminate excess demand for follow-on funds by raising fees? We propose a model of learning that leads to informational holdup. Current investors learn about skill whereas outside investors observe only returns. This gives current investors holdup power when the VC raises his next fund: Without their backing, no-one will fund him, as...

Institutional investors exhibit substantial home-state bias in private equity. This effect is particularly pronounced for public pension funds, where overweighting amounts to 9.8% of aggregate private-equity investments and 16.5% for the average limited partner. Public pension funds' in-state investments achieve performance that is lower by two to...

We examine theories of partner choice in venture capital co-investment networks. We find little evidence of similarity-based matching as a motive for co-investment ties. Rather, VC firms tend to form ties with the best available partner in terms of investment scope and network access, but form ties with partners with dissimilar levels of experience...

An important type of product differentiation in the VC market is industry specialization. We estimate a market structure model to assess competition among differentiated participants in the venture capital (VC) industry. The impacts of competitor presence on profits appear markedly different than in other industries with differentiated competitors....

I examine the effects of venture capital backing on the corporate governance of the entrepreneurial firm at the time of transition from private to public ownership. Using a selection model framework that instruments for venture backing with variations in the supply of venture capital, I conduct three sets of tests comparing corporate governance in...

Institutional investors of all types exhibit substantial home-state bias when investing in private equity (PE) funds. This effect is particularly pronounced for public pension funds, where the local overweighting amounts to 9.7% of the private equity portfolio on average, based on 5-year rolling average benchmarks. Public pension funds’ own-state i...

In this paper, we explore fund managers' abilities to generate abnormal profits in the real estate market, a market characterized by relative inefficiency compared to the publicly-traded equities market. We adapt the Daniel, Grinblatt, Titman and Wermers (1997) measures of 'Characteristic Timing' and 'Characteristic Selectivity' to measure public a...

Why don't successful venture capitalists eliminate excess demand for their follow-on funds by aggressively raising their performance fees? We propose a theory of learning that leads to informational hold-up in the VC market. Investors in a fund learn whether the VC has skill or was lucky, whereas potential outside investors only observe returns. Th...

Existing models of the size and scope of investment activity traditionally assume an infinite pool of ex-ante identical projects, despite the fact that managers often face a limited choice of projects that vary in quality. In this paper, we investigate optimal project selection in a model in which a portfolio manager observes a limited pool of hete...

We examine whether strong networks among incumbent venture capitalists (VCs) in local markets help restrict entry by outside VCs, thus improving incumbents' bargaining power over entrepreneurs. More densely networked markets experience less entry, with a one-standard deviation increase in network ties among incumbents reducing entry by approximatel...

We evaluate the impact of the Sarbanes-Oxley Act (SOX) on shareholders by studying the lobbying behavior of investors and corporate insiders in order to affect the final implemented rules under SOX. Investors lobbied overwhelmingly in favor of strict implementation of SOX, while corporate insiders and business groups lobbied against strict implemen...

We examine whether options granted to non-executive employees affect firm performance. Using new data on option programs, we explore the link between broad-based option programs, option portfolio implied incentives, and firm operating performance, utilizing an instrumental variables approach to identify causal effects. Firms whose employee option p...

This paper uses a newly created dataset containing the performance of 4,848 investments of 151 Private Equity (PE) firms between 1973 and 2002. This data allows us to present new results on the cross-section of private equity investments. We find that private equity investments are held on average for 4 years with only 14% of quick flips (held less...

We propose and test a theory of learning about fund manager skill and informational hold-up in the venture capital market. The model predicts that higher returns on the current fund increase (a) the probability that a VC will raise a follow-on fund, (b) the size of the follow-on fund, and (c) the performance fee investors are charged in the follow-...

Venture capital contracts give VCs enormous power over entrepreneurs and early equity investors of portfolio companies. A large literature examines how these contractual terms protect VCs against misbehavior by entrepreneurs. But what constrains misbehavior by VCs? We provide the first systematic analysis of legal and non-legal mechanisms that pena...

Recent studies suggest that the underperformance of IPOs in the post-1970 sample may be a small sample effect or That is, IPO underperformance may result from observing too few star performers ex post than were expected ex ante. We develop a model of IPO performance that captures this intuition by allowing returns to be drawn from mixtures of outst...

In this paper we show that firms whose directors have tied social networks among the corporate elite exhibit weaker firm governance. Using data on 25,621 unique direc-tors who served on the boards of S&P 1,500 firms between the years 1996-2004, we map the entire social network of directors, and generate different measures that account for each dire...

This paper argues that tied social networks of directors among the corporate elite affect CEO compensation. Using data on 25,621 unique directors who served on the boards of S&P 1,500 firms between the years 1996-2004, we map the social network of directors, and generate three different measures that account for each director's im-portance in the n...

Many financial markets are characterized by strong relationships and networks, rather than arm's-length, spot market transactions. We examine the performance consequences of this organizational structure in the context of relationships established when VCs syndicate portfolio company investments. We find that better-networked VC firms experience si...

In this paper we show that firms whose directors have tied social networks among the corporate elite exhibit weaker firm governance. Using data on 25,621 unique direc-tors who served on the boards of S&P 1,500 firms between the years 1996-2004, we map the entire social network of directors, and generate different measures that account for each dire...

We examine whether options granted to rank and file employees have effects on the performance of the firm, by exploring the link between broad-based option grants, option portfolio implied incentives and firm operating performance. We employ an instrumental variables approach that combines information about the labor market characteristics in which...

Many financial markets are characterized by strong relationships and networks, rather than arm's-length, spot-market transactions. We examine the entry-deterring effects of this organizational choice in the context of relationships established when VCs syndicate portfolio company investments using U.S. data for the period 1980 to 2003. Our results...

We demonstrate that the time-series dynamics of traditional measures of earnings man-agement contain considerable information about the informativeness, or "quality," of reported corporate earnings. We find that both accruals and discretionary accruals exhibit negative serial autocorrelation. On the basis of this finding, we hypothesize that the lo...

In making its investment decisions, a venture capital rm must consider whether to be a generalist or a sector specialist. While spreading investments across sectors has benets { such as diversifying the rm's holdings and opening up a larger pool of investment opportunities { it reduces the benets of specialization, namely that a specialist has grea...

Submitted to the Graduate School of Business. Copyright by the author. Thesis (Ph. D.)--Stanford University, 2003.