Currently, my research focus is on multiple aspects of financing innovation. This exciting research field covers a broad range of important issues, related to such topics as venture capital (VC), entrepreneurial finance, and corporate innovation.
My research within this broad agenda includes: analyzing the valuation principles of VC-backed companies and the implications for fair values of the most valuable of these companies; exploring the ways venture capitalists make investment decisions and add value to their portfolio companies; examining the determinants of VC investment returns and the success of entrepreneurial companies; and the impact of the VC industry on the U.S. economy.
My research on financing innovation has been presented to academic community, multitude of practitioners, and featured and commented on in the media.
Some of the financing innovation topics my colleagues and I are actively studying include: how corporate venture capitalists make decisions and best (and worst) practices in corporate VC; valuation of early-stage VC-backed companies; contracting and corporate governance of VC-backed companies; contracts between VC funds and their investors and their impact on VC fund returns; optimizing the portfolio decisions of start-up investors; and the determinants of success and failure of start-ups and start-up investors. Stay tuned for release of new research results.
This recent work is based on my research of how firms and individuals make dynamic financing and investment decisions, and how these decisions play out in aggregate. Toni Whited and I wrote a review of dynamic corporate finance. Here are some other examples of my research in this broad area: capital structure of banks and the impact of capital regulation, optimal dynamic corporate financial policies; dynamic policies of abandoning innovative ventures; explaining various stylized facts such as the low-leverage, equity premium, and credit risk puzzles; interactions between corporate decisions and credit risk; the macroeconomic impact of financial decisions; market-based estimation of default costs; empirical modeling of dynamic capital structure. My co-authors and I also explore the long-term history of U.S. default rates, link them to macroeconomics and banking crises, as well as investigate the evolution of the global stock ownership.