@booklet {shapira-efmorcipapocaivc2011,
	title = {Entrepreneurial Finance Meets Organizational Reality: Comparing Investment Practices And Performance Of Corporate And Independent Venture Capitalists},
	howpublished = {Discussion Papers},
	year = {2011},
	month = {8},
	publisher = {Strategic Management Journal, 31: 990 {\textquotedblleft}1017 (2010)},
	abstract = {This paper investigates the effect of compensation of corporate personnel on their investment innew technologies. We focus on a specific corporate activity, namely corporate venture capital(CVC), describing minority equity investment by established-firms in entrepreneurial ventures.The setting offers an opportunity to compare corporate investors to investment experts, theindependent venture capitalists (IVCs). On average, we observe a performance gap betweencorporate investors and their independent counterparts. Interestingly, the performance gap issensitive to CVCs{\textquoteright} compensation scheme: it is the largest when CVC personnel are awardedperformance pay. Not only do we study the association between incentives and performancebut we also document a direct relationship between incentives and the actions managersundertake. For example, we observe disparity between the number of participants in venturecapital syndicates that involve a corporate investor, and those that consist solely of IVCs. Thedisparity shrinks substantially, however, for a subset of CVCs that compensate their personnelusing performance pay. We find a parallel pattern when analyzing the relationship betweencompensation and another investment practice, staging of investment. To conclude, the paperinvestigates the three elements of the principal-agent framework, thus providing direct evidencethat compensation schemes (incentives) shape investment practices (managerial action), andultimately investors{\textexclamdown}{\textbrokenbar} outcome (performance).},
	url = {/files/dp589.pdf},
	author = {Shapira, Gary Dushnitsky and Zur}
}
