• Initial public offerings;
  • founder;
  • venture capitalist;
  • corporate governance;
  • cognition;
  • symbolic action;
  • decision making


We consider how a venture capital firm's perceived uncertainty in new and uncertain industry environments affects its decisions to retain founder-CEOs at companies they take public. We further consider how the human capital of the founder-CEO, the overall experience of the venture capital firm (VCF), and the VCF's specific experience with the new industry moderate the relationship between industry-based uncertainty and founder-CEO retention. We explore these issues in the context of 340 venture capital firm investments in Internet sector start-ups that went public from 1995 to 2000. We find evidence that industry-based uncertainty decreases the likelihood of founder-CEO retention, that founder-CEO human capital and VCF Internet-sector experience decreases the effects of these uncertainties on founder-CEO retention for business-to-business (B2B) firms, but increases them for business-to consumer (B2C) firms, and that VCF age further decreases the likelihood that the founder-CEOs of B2C firms will be retained. Copyright © 2009 Strategic Management Society.