Valuation, entrepreneurial finance, ESG
Predicting Profitability of Newly Established Firms, with Katja Kisseleva-Scherenberger (Frankfurt School of Finance & Management) and Per Olsson (ESMT Berlin) - draft upon request
This study evaluates the extent to which one can predict the profitability of newly established firms. Profitability starts mean-reverting with an average one-year persistence rate of almost 50% as early as at firm age two and overcomes the most of the initial difference by the age four. This is primarily driven by high persistence rates in revenues and personnel expenses. Venture capital-backed firms exhibit an upward-reversion only and are fully converged (in median terms) by the age of six. While their revenue and personnel expenses persistence is slightly lower, capex exhibits a more persistent pattern in these firms. Overall, we show that profitability is predictable from the beginning of firm life and is useful in early-stage investment and lending decision-making processes.
Besides research, she likes reading, drinking, and functional training.
