In response to the original post about the “Building a Board” results (see below), Tim Connors of USVP inquired about the role played by the company’s stage of development. Even though our analyses (and the original blog posting) focus on the linkage between Board characteristics and CEO characteristics, we also controlled for the impact of the company’s stage of development. (Other controls were the company’s industry segment and the time period in which the data was collected.) We used the following Company Stage controls:
- # rounds of financing
- Dollars raised in last round
- Revenues in current year
- Company age (months)
- Number of employees
Here is the impact of each variable on our 3 Board dimensions. (Empty cells indicate relationships that were not statistically significant.)
So the results support Tim’s contention that Company Stage has a key impact on Board characteristics, but hopefully add more details to that, highlighting which Company Stage variables are the strongest drivers of each Board characteristic.
Once again, feel free to post any thoughts on individual cells in the table (whether they make sense to you, whether you’re surprised that they’re empty, etc.) or on other overall patterns we are missing!
(One last note on the dataset: The dataset we are using for this paper is comprised of 444 private IT companies, collected in 2000, 2001, and 2002. We use the three years to help eliminate any artifacts introduced by market fluctuations, using year dummies to control for differences across the years.)