Entrepreneurship

Vertical integration and contracting are useful tools for understanding entrepreneur-ship, too. For example, contracting problems explain why venture capital is organized the way it is. Also, my study in the Sahara Desert highlights the central role of hierarchy and the employment relation for entrepreneurship in developing as well as developed economies.

"Hostages and the Emergence of Venture Capital" (working paper, 2016)

The VC industry is often misunderstood, but it is often crucial to entrepreneurial success. In this paper, I explain the logic behind VC by asking, How is the VC industry organized and why? I examine the early period of the industry, in the 1970s, before VCs had reputations and expectations about whether or how VC investing might work, to lay bare the fundamental problems they face. I argue that a portfolio problem and managerial involvement in start-ups combine to make co-investing with other VCs (in "syndicates") a necessity. But co-investing comes with contracting problems, which were solved eventually through hostages and social networks.

"The political economy of technology adoption: The case of Saharan salt mining" (Extr. Ind. Soc., 2015)

I partner with anthropologist Sima Rombe-Shulman and engineer Dayo Shittu to understand why miners in Taoudenni, Mali continue to use primitive technology, including wooden tools to extract salt and camels to transport it. This probably seems about as far away as you can get, literally, from entrepreneurship concerns in this country. But what we find, from our deep-dive into this narrow and exotic setting, is something universal: hierarchy matters for firms, firm growth, and employment. So, as students consider entrepreneurship, we provide evidence for first gaining a working acquaintance with hierarchy, which gets a bad rap as bureaucratic and slow.