Abstract
We study how firm characteristics evolve from early business plan to initial public of-fering (IPO) to public company for 50 venture capital (VC)-financed companies. Firmbusiness lines remain remarkably stable while management turnover is substantial.Management turnover is positively related to alienable asset formation. We obtain similar results using all 2004 IPOs, suggesting that our main results are not specific to VC-backed firms or the time period. The results suggest that, at the margin, in-vestors in start-ups should place more weight on the business (“the horse”) than onthe management team (“the jockey”). The results also inform theories of the firm.