Department of Management & Technology
Via Roentgen 1
20136 Milan, Italy
NBER Working Papers and Publications
|February 2018||Waiting for the Payday? The Market for Startups and the Timing of Entrepreneurial Exit|
with Ashish Arora, Thomas Roende: w24350
Most technology startups are set up for exit through acquisition by large corporations. In choosing when to sell, startups face a tradeoff. Early acquisition reduces execution errors but later acquisition improves the likelihood of finding a better match since in the early market, there are fewer buyers because early acquisition requires costly absorptive capacity. Moreover, the buyer’s decision to invest in absorptive capacity is related to the startup’s decision about the timing of the exit sale. In this paper, we build a model to capture this complexity and the related tradeoffs. We find that the early market for startups is inefficiently thin if the timing of exit is a strategic choice, i.e. startups have to commit to whether to exit early or late. Too few startups are sold early, and ...
|July 2012||Managing Licensing in a Market for Technology|
with Ashish Arora, Thomas Roende: w18203
Over the last decade, companies have paid greater attention to the management of their intellectual assets. We build a model that helps understand how licensing activity should be organized within large corporations. More specifically, we compare decentralization--where the business unit using the technology makes licensing decisions--to centralized licensing. The business unit has superior information about licensing opportunities but may not have the appropriate incentives because its rewards depend upon product market performance. If licensing is decentralized, the business unit forgoes valuable licensing opportunities since the rewards for licensing are (optimally) weaker than those for product market profits. This distortion is stronger when production-based incentives are more powerf...
Published: “Managing licensing in a market for technology” (with Andrea Fosfuri and Thomas Roende). May 2013. Management Science. 59(5):1092-1106. citation courtesy of