Desmarais Global Finance Research Centre (DGFRC) Seminar: Umit Gurun
Umit Gurun
University of Texas at Dallas
Platform Venture Capitalists
Date: Friday, October 25, 2024
Time: 10:30-11:45 am
Location: Bronfman Bldg. (1001 Sherbrooke St. West), Room 340
All are cordially invited to attend.
Abstract:
We examine the effects of platform-backed venture capitalists on portfolio firms, focusing on Google Ventures (GV) and its affiliation with Google Play. By comparing the same mobile app on Google Play and Apple鈥檚 App Store, we find that post-GV investment, startups鈥� Android apps on Google Play show a 115% increase in review volume, a 12% rise in average rating, and a 77% drop in bug-related reviews compared to their iOS counterparts. These improvements occur independently of app updates and are thus unlikely to be explained by intrinsic enhancements facilitated by GV鈥檚 technical guidance. Comparing two snapshots of review data collected in July 2023 and January 2024, covering the same period, July 2022 to June 2023, we find that negative and bug-related reviews are disproportionately removed for GV-backed apps, leading to artificially inflated ratings. A deep learning model-based analysis indicates that there is little semantic difference between the removed negative reviews and the retained negative reviews. GV-backed apps also receive increased visibility through 鈥淪imilar app鈥� suggestions on main pages. These findings suggest GV鈥檚 strategic utilization of the Google Play platform to support its portfolio firms and highlight the need to reassess platform neutrality and competitive fairness in the digital marketplace.
