June 18, 2007
Going public? Boot the boss
By Matthew L. Brown
A new study from the Stanford University Graduate School of Business and a professor at the Sloan School of Management at MIT says the success of start-up companies can be tied to management turnover and corporate leadership.
The scholars studied how the composition and turnover of founding and senior management teams at venture-funded businesses impacted company success.
According to Stanford, the results confirmed that founding and senior management with a variety of prior company affiliations and "broad functional diversity" tend to be more successful more quickly.
The researchers, which included Diane Burton of the Sloan School, Charles O'Reilly of Stanford and Christine Beckman of the University of California, Irvine, found that turnover, including the exit of the company founder, increases the likelihood that the company will achieve an IPO.
The researchers determined success by a company's ability to attract venture capital funding and complete an IPO.
The scholars studied how the composition and turnover of founding and senior management teams at venture-funded businesses impacted company success.
According to Stanford, the results confirmed that founding and senior management with a variety of prior company affiliations and "broad functional diversity" tend to be more successful more quickly.
The researchers, which included Diane Burton of the Sloan School, Charles O'Reilly of Stanford and Christine Beckman of the University of California, Irvine, found that turnover, including the exit of the company founder, increases the likelihood that the company will achieve an IPO.
The researchers determined success by a company's ability to attract venture capital funding and complete an IPO.
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