| The first chapter examines whether the educational connections between managers of venture capital (VC) firms can alleviate the search frictions and coordination costs experienced by the firms when seeking to form economic ties with other organizations. Two given VC firms are almost three times as likely to syndicate an investment together if their managers share an educational connection. Investments syndicated by VC firms whose managers share educational connections are more likely to receive follow-on funding, more likely to achieve IPO exit, and have a shorter time to IPO. These effects are stronger in early stage investments and for those VC firm-pairs syndicating with each other for the first time, and do not appear to be due to similarities in manager latent talent.;The second chapter examines a novel explanation of the method of payment in corporate acquisitions. U.S. legal rules create an interim period between deal announcement and completion, during which firm values change and targets can accept new offers. Stock offers reduce the bidder's risk of over-paying if bidder and target values are highly correlated, but worsen the overpayment with low correlation. Empirical results show that the likelihood of a stock offer is increasing in bidder-target correlation, but only in deals subject to the interim period. Consistent with the theory, the effect is stronger in deals with high uncertainty and relatively larger targets. |
