FAU-CMF-Finec. Does Government Contracting Impact Venture Capital Investment Outcomes?

Masim Suleymanov, PhD Candidate in Finance, Florida Atlantic University: 0:11 Previous experience with government as customers 0:45 Introduction: modern organization is defined as “a nexus of contracts“ among various stakeholders (Jensen and Meckling, 1976) 1:08 Venture Capital firms 1:33 Government contracts 1:50 Small businesses and government contracting 2:35 “We all know how the (Silicon) Valley feels about government. Funds hire expensive consultants to navigate the black box of Washington D.C. But things don’t always work out. Then they are left with scars. But you ignore the government at your own peril“ — Yanev Suissa 2:51 Research Question: how does government contracting activity of portfolio companies impact the exit outcomes of VC investment on these companies? 3:28 Hypothesis 1: VC-backed companies with government contracts are more likely to exit successfully via IPOs or acquisitions and less likely to be liquidated 4:28 Hypothesis 2: Government contractors with greater bargaining power (based