Venture capital transforms start-ups, professionalizing firms and accelerating growth.
The study looked at how venture capital affects new companies. They studied start-ups in Silicon Valley and found that venture capital is linked to companies becoming more professional. This includes things like better human resource policies, offering stock options, and hiring a marketing VP. Companies with venture capital are also more likely to replace their founder with an outside CEO, sometimes even when both parties agree. This shows that venture capitalists do more than just provide money to start-ups.