This paper investigates the effects of funding from family and friends (i.e., informal funding) on subsequent access to venture capital for start-up firms. We retrieve information on financing activity of young U.S. firms from a novel dataset based on private placements filings (Form Ds). To address potential endogeneity issues, we use an instrument that hinges on the family size of founders as an exogenous constraint on the supply of informal funds. Our results show that informal finance significantly reduces the probability of future financing events. We provide suggestive evidence that this is due to conflicts of interests between informal stakeholders and professional investors.

We obtain a model-driven measure of gender norms on intra-household financial decision making by leveraging dramatic variation across Italian cohorts and regions in the gender of the household head. We use these estimates to identify the effects of gender parity on household financial decisions. More egalitarian norms increase household participation in financial markets, equity holdings, asset diversification, and returns on investments . This evidence suggests that gender roles can have large economic costs . Consistent with this view, we show that patriarchal norms began receding in the early 1990s, when a pension reform made it too costly to comply with traditional roles.

Using a comprehensive dataset of Italian small and medium-sized enterprises, we find that differences between private and public information on firm creditworthiness affect the decision to issue bonds. Our evidence supports favorable (rather than adverse) selection in corporate bond markets. Specifically, holding public information constant, firms with better private fundamentals are more likely to access bond markets. These effects are weaker for opaque firms and stronger for firms with worse publicly observable risk. Additionally, credit conditions improve for issuers following the bond placement, compared with a matched sample of non-issuers. This is consistent with a model where banks offer more flexibility than markets during financial distress and firms use market lending to signal credit quality to outside stakeholders.

We examine the effects of mandatory board gender quotas on unregulated firms that are connected to regulated ones via interlocking directorates. After the introduction of quotas, connected firms significantly increase their share of female directors relative to similar unconnected firms. The spillover effects are substantial — at least as large as the direct effects on regulated firms, challenging previous claims that quotas have no broader impact on women in business. Our results suggest that quotas indirectly broaden the supply of candidates for connected firms, along dimensions that include, but are not limited to, gender.