主题：Exit Before Explosion: Venture Capital Reputation Change After Portfolio Firms’ Fraud Investigations

主讲：吴悠 助理教授 香港中文大学

时间：2023年2月23日上午9:00

地点：经管院A321

摘要：Previous studies indicate that investing in fraudulent firms harms the reputation of venture capital firms (VCs). However, while the initial investment decisions send a signal of incautious deal screening and post-investment monitoring, an early exit decision can send a signal of advantageous access to information and fast decision-making. With strong enough positive signals from early exit, VC firms may not necessarily be penalized for investing in fraudulent firms, or even gain an increase in reputation. We analyze this possibility by examining all Chinese public companies involved in China’s Securities Regulatory Commission (CSRC)’s company fraud announcement. We find that VCs who succeeded in getting away experienced a substantial reputation increase compared to VCs who failed to get away before a fraud of portfolio firms is exposed. We further analyze the mechanism of reputation boost by examining two moderators: a signal of advantageous information access, and a signal of superior decision-making capabilities. We find support for both mechanisms by showing that the reputation boost is stronger for VCs with government ties and lead VCs. Our study contributes to VC investment literature by showing that wise exit decisions can remedy potential problems in initial investment decisions.

讲座人简介：You (Willow) Wu is an Assistant Professor at the Department of Management in The Chinese University of Hong Kong (CUHK) Business School. Willow achieved her PhD degree in Management Science and Engineering at Stanford University, and achieved dual bachelor’s degree in Environmental Sciences and Economics at Peking University. Willow’s research interests lie in technology entrepreneurship and entrepreneurial strategy in nascent markets. Theoretically, her work focuses on how entrepreneurs resolve institutional contradictions in the setting of marketization, digitization, and tokenization. Empirically, she uses econometric models and natural language processing methods to quantitatively analyse entrepreneurial strategy and performance. Her research has been published in theQuarterly Journal of Management,Regional Studiesand theStrategic Entrepreneurship Journal.