Human Resources in Initial Public Offering Firms: Do Venture Capitalists Make a Difference?

Abstract

Venture capitalists’ preference for complete, well-balanced founding teams is well established. In addition, the strategic human resource management literature posits that superior performance might accrue to firms that have a member of the top management team responsible for human resources. In this paper, we test whether or not venture capitalist backing affects the likelihood that initial public offering firms will report having a vice president of human resources. We also examine the combined effect on performance as a result of being venture capital-backed and having a vice president of human resources.