We examine how venture capitalists (VCs) adapt their financing strategies when investing in startups that compete against deep-pocketed incumbents. Employing textual analysis to identify a startup’s potential competitors, we show that when competitors are cash-rich, VCs deploy a financing strategy characterized by less conditionality, as observed through larger, less frequent funding rounds that are less contingent on short-term performance. This strategy requires VCs to rely more on continuous monitoring and liquidation protection, and is restricted to larger funds with specialized experience. Our results highlight that product market competition plays an important role in explaining VC financial contracting choices.

An unprecedented number of firms announced CEO salary reductions at the onset of the coronavirus pandemic. We document that the total compensation for these CEOs did not actually decrease but was instead restructured, leading to a marked increase in opaque components of compensation. These adjustments align with the managerial power view of executive pay setting, whereby heightened stakeholder outrage prompts greater camouflaging of compensation to avoid scrutiny. We further show that this pattern of compensation adjustments predominantly occurred in firms with powerful CEOs, weak institutional investor monitoring, and poorer governance quality.

Common ownership has raised growing antitrust concerns. We compile a comprehensive dataset of U.S. antitrust litigation cases from the Federal Trade Commission, the Department of Justice, and consumer-initiated lawsuits to shed light on these concerns. We find no robust relationship between common ownership of firm-pairs and the likelihood of these firms being jointly sued. Furthermore, common ownership is negatively associated with potential channels of collusion, such as interlocking directors and competitor-benchmarked executive pay. Evidence from institutional mergers and S&P 500 additions of rival firms supports our main conclusions. Overall, our results offer little support for the view that common ownership promotes explicit collusion.