The Development Processes and Performances of Asian American-Founded Ventures in Silicon Valley

Abstract

This article examines the development patterns and performances of companies founded by Asian American entrepreneurs in Silicon Valley and compares them with those of companies founded by non-Asian Americans. The authors find that companies founded by Asian Americans tended to have more Asian Americans in the executive team than those founded by their counterparts. Asian American ventures were more likely to secure venture capital and strategic investments from Asia-based companies and less likely to obtain strategic investment from U.S.-based corporations. In spite of the above differences, the two groups show no systematic differences in founder equity share or company valuation at IPO. The authors also find little statistical difference in the time to IPO (time from company founding to IPO offer date) or post-IPO performances between the two groups.