Date of Award

Spring 2011

Degree Type


Degree Name

Doctor of Philosophy (PhD)

Graduate Group

Managerial Science and Applied Economics

First Advisor

Johannes Pennings


This dissertation analyzes why some VC-funded high-tech firms do not generate harvesting events for investors through a lucrative sale, either to another company or on the stock exchange. I investigate the effects of three signals of quality on failure and persistence. In the first essay, hypotheses are developed on the unintended consequences of patenting. Disclosure, through patents, exposes new firms to undesired spillovers. The second essay exploits asymmetric effects on success and failure to expose start-up persistence. It analyzes another signal of quality—technology breadth, the applicability across domains—and suggests that hazards of disclosure also varies with this breadth. Finally, the third essay examines the effects of signals related to founding team on a third outcome, ‘living dead’—a transitory state to which a start-up shifts when it persists beyond the norm without harvest or failure. I tested these hypotheses on a longitudinal dataset of 428 US VC-backed wireless firms founded between 1990 and 2009 using event history analysis and matched case-control study. I find that a start-up’s failure rate increases as its inventions are cited at a higher rate by others; in addition failure rate increases when the citing firms have a reputation of litigiousness. I show that the effect of signaling a specific technology while experiencing high rate of knowledge diffusion diminishes both the likelihood of failure and success—uncovering persistence. Loss of members in founding teams comprised of entrepreneurs with prior founding experience is found to be a shock that increases the odds of marginal performance.