The Rise of Dual-Class Stock IPOs

Aggarwal, Dhruv; Eldar, Ofer; Hochberg, Yael V.; Litov, L.

doi:10.2139/ssrn.3690670

Cited by 7 publications

(5 citation statements)

References 67 publications

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“…Descriptive statistics reveal that investors are granted voting rights in 15% of STOs, representing 28% of equity tokens in our sample. This suggests that STO issuers tend to insulate themselves from outside control, consistent with recent trends in IPOs (Aggarwal et al, 2021). Although most security tokens are entitled to receive cashflows (i.e., dividends for equity tokens, fixed-interest payments for debt tokens, and incomesharing payments for income-share tokens and fund tokens), this may not necessarily be the case for all fund and other security tokens; some of which are only considered for capital gains by investors.…”

Section: Variables and Descriptive Statisticsmentioning

confidence: 73%

Security token offerings

2021

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This paper posits that distinguishing security token offerings (STOs) from initial coin offerings (ICOs) is important for the study of entrepreneurial finance. We first provide a working definition of a security token and present an overview of the STO market using a unique STO sample. The STO activity developed after the end of the ICO market bubble. The STO market is, however, still a nascent market. STOs are geographically dispersed but concentrated in jurisdictions with accommodating securities laws. Next, we explore STO success factors. We show that various issuer and offering characteristics traditionally used in the ICO literature also matter for STO success. We also find that success is associated with good governance practices, consistent with the corporate finance literature. We conclude by discussing the implications of native digital securities, the next generation of security tokens, for entrepreneurial finance.

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Section: Variables and Descriptive Statisticsmentioning

confidence: 73%

Security token offerings

2021

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“…• A stark pattern of changing bargaining power between entrepreneurs and investors has emerged in several areas. Valuations for startups are increasing (Ewens and Farre-Mensa, 2022), contract terms are becoming more entrepreneur-friendly, founders are more likely to have dual-class shares (Aggarwal et al, 2021) and corporate governance power has shifted to entrepreneurs (Ewens and Malenko, 2022). How do these bargaining power shifts impact the gender or racial gap at entry and financing?…”

Section: Ideas For Future Researchmentioning

confidence: 99%

Gender and race in entrepreneurial finance

Ewens¹

2022

Preprint

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Economic frictions pervade the founding, financing, growing, and exiting of high-growth entrepreneurial firms. This chapter considers one friction that currently affects a small, but important, set of entrepreneurs: racial and gender discrimination. I first collect facts from a large empirical literature that show clear gender and race gaps in participation and financing of startups. Female founders manage 16-25% of all startups, while Black entrepreneurs rarely exceed 3% of the startup population. Conditioning on startups that successfully raise external finance has little impact on these gaps. The complexity of the entrepreneurial process presents several opportunities for discrimination to manifest itself and produce this gap. The chapter details the major discrimination theories and the empirical methods used to test for their presence. It then provides an extensive review of a growing empirical literature in entrepreneurial finance that tests these models. The pattern of evidence reveals a nuanced and incomplete story about bias, information asymmetry, and differential treatment of underrepresented founders. The chapter ends with an extensive set of research ideas motivated by the gaps in the entrepreneurship literature and recent developments in theory and measurement of discrimination.

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“…• A stark pattern of changing bargaining power between entrepreneurs and investors has emerged in several areas. Valuations for startups are increasing (Ewens and Farre-Mensa, 2022), contract terms are becoming more entrepreneur-friendly, founders are more likely to have dual-class shares (Aggarwal et al, 2022) and corporate governance power has shifted to entrepreneurs (Ewens and Malenko, 2022). How do these bargaining power shifts impact the gender or racial gap at entry and financing?…”

Section: Ideas For Future Researchmentioning

confidence: 99%

Race and Gender in Entrepreneurial Finance

Ewens

2022

SSRN Journal

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The Rise of Dual-Class Stock IPOs

Cited by 7 publications

References 67 publications

Security token offerings

Security token offerings

Gender and race in entrepreneurial finance

Race and Gender in Entrepreneurial Finance

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