Based on Venture Capitalists and Employee Satisfaction, a recent working paper
By Marie Lambert Ludovic Phalippou Alexandre Scivoletto
Summary (AI generated)
This paper uses employee reviews from Glassdoor to investigate the impact of venture capitalists (VCs) and private equity (PE) on employee satisfaction. The authors find that VC-backed companies have significantly higher employee satisfaction, with employees citing a supportive culture, growth environment, and positive hiring processes as key advantages. However, they also complain more about compensation and challenging work environments. When VCs exit, employee satisfaction drops and becomes more similar to non-VC-backed companies, but some of the initial differences persist. PE-backed companies, particularly those undergoing primary buy-outs, are associated with lower employee satisfaction, with employees often citing negative changes in senior management and compensation as the cause. The paper also uses a technique called structural topic modelling to analyze the content of employee reviews, providing further insights into the specific advantages and disadvantages of working for VC-backed and PE-backed companies.
