Who’s Who Legal interviewed Ilya Strebulaev of Stanford University to gain his insights on expert witness work, trends in the venture capital sector, and the advice he gives to up-and-coming corporate finance experts.
Q: What motivated you to pursue a career in corporate finance?
A: Corporate finance is an important topic for academics and practitioners alike. My motivation in pursuing this field of study as an academic has been to better understand the decision-making processes of investors, entrepreneurs, and executives, especially in venture capital and private equity.
Q: What do clients look for in an effective expert?
A: In my experience, attorneys look for expert witnesses who demonstrate integrity and deep expertise in the subject matter.
Q: What inspired you to create the Stanford GSB Venture Capital Initiative (VCI)?
A: I am fascinated by the venture capital ecosystem, which is intertwined with the economy and culture of Silicon Valley, where Stanford is located. Quite literally, we are in a prime position to examine key issues that arise in and drive VC. I am particularly passionate about studying how all the parties, and especially investors and founders, make decisions. I founded the VCI to bring together researchers, practitioners, and students to advance the understanding of venture capital and the innovation ecosystem.
My motivation in studying corporate finance as an academic has been to better understand the decision-making processes of investors, entrepreneurs, and executives, especially in venture capital and private equity.
Q: What are the key trends that you have noticed in the venture capital sector?
A: One important trend is that start-ups are raising more funding earlier than they did in the past, and from a more diverse group of investors. Another trend is that start-ups tend to stay private longer.
Q: What do you think the economic role of corporate venture capitalist units is in corporate innovation? Is this changing at all?
A: Corporate venture capital (CVC) has been playing an increasingly important role in corporate innovation. In consulting with leaders of many large companies and their CVC units, I have seen this trend up close.
Q: Are you working on any interesting research in the finance sector that you can tell us about?
A: One project I am working on right now is how CVC units are organized and make decisions. Another project is how earlier-stage investors structure pre-seed financing, such as convertible notes and SAFEs (simple agreements for future equity).
Do not be afraid to take risks as a researcher, and be prepared to ask difficult questions that have resonance with and relevance for important academic and practical issues.
Q: What advice do you have for up-and-coming corporate finance experts?
A: I always give the same two pieces of advice to our Stanford PhD students who are pursuing finance topics. First, try to understand the institutional details and concerns that practitioners have; these offer important insight into their choices and decisions. Second, work hard to be the best in pure academic research.
Q: What is the greatest piece of advice you have ever received?
A: My doctoral advisor told me: Do not be afraid to take risks as a researcher, and be prepared to ask difficult questions that have resonance with and relevance for important academic and practical issues. The answers to those questions can help you get to the crux of a topic, and in turn, propel the research. I have been trying to follow that advice ever since.