Social Capital and the Performance of Asian American-Founded Ventures in Silicon Valley (Interactive Paper)

We analyze the relative performance of Asian American-founded ventures (relative to those founded by non-Asian American or “mainstream” entrepreneurs) in terms of time-to-IPO, market valuation at IPO, and post-IPO performance. The study sample is composed of 118 technology companies in the Silicon Valley, 31% of which were founded by Asian Americans. We use Cox hazard model to examine how explanatory variables affect the likelihood that a venture will go to IPO in each period. Natural logarithm regression is used to estimate the market valuation at IPO. In addition, to trace the change of valuation, we examine share price gains after IPO using a multiple general linear (GLM) model.