On November 5, 2025 we continued the ICGE Speaker Series with Murillo Campello of The University of Florida’s Warrington College of Business. Murillo presented “Tax Incentives and the Governance of Venture Capital Risk-Taking” and ICGE Research Director, Luiz Ricardo Kabbach, moderated.

Professor Campello shared evidence on how tax policy can influence venture capital behavior, showing that tax subsidies not only encourage greater risk-taking among investors but can also lead to more innovative and higher-valued ventures.

+ Tax Incentives and the Governance of Venture Capital Risk-Taking

Can tax subsidies prompt investors to take on more risk? We address this question within a framework in which venture capitalists (VCs) combine outside funding with incentive-based compensation and examine a policy that eliminated capital gains taxes on startup investments. Our study analyzes data from 158 thousand investor–firm pairings over two decades. We find that when and where tax subsidies apply, VCs shift their project selection toward riskier ventures: they become more likely to provide tax-eligible businesses with their initial capital, venture more into pre-commercial stage startups, invest in industries in which they have no prior experience, and more in firms with pre-existing debt, while becoming less likely to co-syndicate their investments. These portfolio firms eventually show higher failure rates. On the flip side, the increased risk-taking yields salient return outcomes: tax-subsidized VC-backed ventures attain higher valuations at exit and are more likely to reach “unicorn status.” None of these patterns are observed for comparable non-VC investors eligible for the same tax subsidies. Our study is the first to show that tax policy can shift entrepreneurial financing toward riskier, more experimental, valuable ventures, with outcomes shaped by investor organizational structure and incentives.

Professor Murillo Campello is an internationally recognized scholar of Financial Economics. Campello’s papers have been cited by prominent policy authorities, such as the Federal Reserve chairman, mentioned in Congressional hearings, described in the “Economic Report of the President,” and used to advise the U.S. Supreme Court. His work on the Financial Crisis, Brexit, and Covid-19, in particular, has been widely featured in the financial press (Financial Times, Reuters, The Wall Street Journal), books, and academic outlets.

Professor Campello is an Eminent Scholar in Finance at the University of Florida. He is the Managing Editor of The Journal of Financial Intermediation. He is also a Research Associate of the National Bureau of Economic Research, a Director of Research at the Judge Business School at the University of Cambridge, and a Distinguished Scholar at Pembroke College (Cambridge). Campello is a former chaired professor at the Johnson Graduate School of Management at Cornell University. He earned his PhD in Finance from the University of Illinois, an MS in Business Administration from the Pontifical Catholic University of Rio de Janeiro, and a BS in Economics from the Federal University of Rio de Janeiro.

We’re pleased to announce the Institute for Corporate Governance + Ethics’ Speaker Series Fall 2025 Schedule! This semester, we’ll be diving into a variety of timely and thought-provoking topics in corporate governance and ethics. Each seminar will feature a presentation by a leading scholar, followed by a live Q&A session where you can engage directly with their research and insights. Whether you’re interested in emerging challenges, practical solutions, or new perspectives shaping the field, our series offers a chance to connect ideas with real-world impact. If your schedule doesn’t allow you to attend live, we encourage you to register anyway—all registrants will receive a recording of the event to watch at their convenience!

+ Artificial Intelligence and the Value of Choice
9/4/25   |   10:00am ET
Vikram Bhargava
Moderated by Suneal Bedi

Many of the most widely discussed ethical concerns regarding AI algorithms—for example. hiring algorithms—pertain to bad outcomes: Were its decisions accurate? Were there unforeseen bad consequences? Were untoward biases reflected in the judgments of the algorithms? In this presentation, Dr. Bhargava will argue even if these bad outcomes are ultimately engineered away, it still doesn’t settle the question of whether managers should defer to algorithms. This is not because managerial gut instincts are far superior—often they’re not. Rather, there are important (and overlooked) ethical values created through us making choices that would be jeopardized, were certain choices abdicated to an algorithm. This is so no matter how sophisticated algorithms ultimately become at predicting fit and performance.

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+ Closing Loopholes in SEC Disclosure Rules for Foreign Companies
10/2/25   |   1:00pm ET
Daniel Taylor
Moderated by Joe Schroeder

Professor Taylor will discuss loopholes in SEC disclosure rules as they relate to foreign companies listed in US exchanges and discuss empirical evidence in how those loopholes are being used to expropriate capital from US investors.

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+ Tax Incentives and the Governance of Venture Capital Risk-Taking
11/5/25   |   12:00pm ET
Murillo Campello
Moderated by Luiz Ricardo Kabbach

Can tax subsidies prompt investors to take on more risk? We address this question within a framework in which venture capitalists (VCs) combine outside funding with incentive-based compensation and examine a policy that eliminated capital gains taxes on startup investments. Our study analyzes data from 158 thousand investor–firm pairings over two decades. We find that when and where tax subsidies apply, VCs shift their project selection toward riskier ventures: they become more likely to provide tax-eligible businesses with their initial capital, venture more into pre-commercial stage startups, invest in industries in which they have no prior experience, and more in firms with pre-existing debt, while becoming less likely to co-syndicate their investments. These portfolio firms eventually show higher failure rates. On the flip side, the increased risk-taking yields salient return outcomes: tax-subsidized VC-backed ventures attain higher valuations at exit and are more likely to reach “unicorn status.” None of these patterns are observed for comparable non-VC investors eligible for the same tax subsidies. Our study is the first to show that tax policy can shift entrepreneurial financing toward riskier, more experimental, valuable ventures, with outcomes shaped by investor organizational structure and incentives. 

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+ Corporate Climate Lobbying
12/3/25   |   12:00pm ET
Zacharias Sautner
Moderated by Luiz Ricardo Kabbach

A frequently voiced concern is that corporate lobbying activities, at least in part, hinder the implementation of ambitious climate policies. We quantify corporate anti- and pro-climate lobbying expenses of U.S.-listed firms and identify the largest corporate lobbyists and their motives. Firms spend on average $277k per year on anti-climate lobbying ($185k on pro-climate lobbying). Anti-climate lobbyists have more carbon-intensive business models, while pro-climate lobbyists exhibit more green innovation. Firms that spend more on anti-climate lobbying earn higher returns because of a risk channel. Our results align with the increasingly common investor view that anti-climate lobbying constitutes an investment risk.

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