Using one million employee reviews, we find that corporate ownership is strongly correlated with employee satisfaction. Employees are more satisfied in privately held companies than in public companies, and employee satisfaction plummets after a Primary Buy-Out transaction. The most significant effect, however, is when a company is VC-backed. Employee satisfaction is abnormally high in the presence of a VC and decreases as the VC exits. Reviews content shows that VC-backed employees enjoy the senior management support and leadership style, as well as the Human Resource processes at large. On the other hand, they disproportionately complain about the fast changes in the company and the low salaries. When the VC exits, the topics mentioned in the reviews and the satisfaction score become closer to those of similar companies, but the initial differences persist. Our findings bode well with the theories highlighting the influence of VCs on company operations.

Other authors: Marie Lambert and Alexandre Scivoletto, University of Liège – HEC Liège