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Many factors come into play when a startup morphs into a modern corporation.
Although a crush of money earned in the bull market of recent years has flowed into venture capital, little is known about its effects on the development of a firm. To answer that question, Stanford Graduate School of Business faculty members Thomas Hellmann and Manju Puri examined how venture capitalists influence startup companies. In a traditional financial relationship, investors are involved on the financial side of the business but not on the human resource side. It provides a number of services besides financing, but until now we have not really had any systemic evidence on this. As a rule, founders don't last as long in the executive chair if they have venture money.