Characteristics of Private Schools in the United States: Results From the 2011-12 Private School Universe Survey

In 1988, the National Center for Education Statistics (NCES) developed a private school data collection that improved on the sporadic collection of private school data dating back to 1890 bydeveloping an alternative to commercially available private school sampling frames. Since 1989, the U.S. Bureau of the Census has conducted the biennial Private School Universe Survey (PSS) for NCES. The PSS is designed to generate biennial data on the total number of private schools, students, and teachers, and to build a universe of private schools to serve as a sampling frame of private schools for NCES sample surveys. For more information about the methodology and design of the PSS, please see the Technical Notes in appendix B of this report. The target population for the PSS is all schools in the 50 states and the District of Columbia that are not supported primarily by public funds, provide classroom instruction for one or more of grades kindergarten through 12 (or comparable ungraded levels), and have one or more teachers. Organizations or institutions that provide support for home schooling, but do not provide classroom instruction, are not included. The 2011 -- 12 PSS data were collected between September 2011 and May 2012. All data are for the 2011 -- 12 school year except the high school graduate data, which are for the 2010 -- 11 school year.Because the purpose of this report is to introduce new NCES survey data through the presentation of tables containing descriptive information, only selected findings are listed below. These findings are purely descriptive in nature and are not meant to imply causality. These findings have been chosen to demonstrate the range of information available from the 2011 -- 12 PSS rather than to discuss all of the observed differences, emphasize any particular issue, or make comparisons over time.The tables in this report contain counts and percentages demonstrating bivariate relationships. All of the results have been weighted to reflect the sample design and to account for nonresponse and other adjustments. Comparisons drawn in the selected findings have been tested for statistical significance at the .05 level using Student's t statistics to ensure that the differences are larger than those that might be expected due to sampling variation. No adjustments were made for multiple comparisons. Many of the variables examined are related to one another, and complex interactions and relationships have not been explored. Statistical Analysis Software (SAS 9.2) and SUDAAN (10.0) were used to compute the statistics for this report

The Role of Independent Directors in VC-Backed Firms

This Article develops a new theory to explain the widespread use of independent directors in the governance of startup firms. Privately held startups often assign a tie-breaking board seat to a third-party independent director. This practice cannot be explained by the existing corporate governance literature, which relies on diffuse ownership and passive investment-features unique to the publicly traded firm. To develop an alternative theory, I model a financing contract between an entrepreneur and a venture capital investor. I show that allocating a tie- breaking vote to an unbiased third party can prevent opportunistic behavior that would occur if the firm were controlled by its entrepreneur or VC investor. Rather than monitoring management, independent directors in a startup firm arbitrate disputes between entrepreneurs and investors. Consistent with my theory, empirical data from Silicon Valley startups illustrate several mechanisms entrepreneurs and VCs use to select an unbiased independent director. My analysis has implications for corporate law, as it suggests that heightened fiduciary protections could undermine the role of the independent director in startup firms

Charity and Information: Correcting the Failure of a Disjunctive Social Norm

Charitable donations fund social goods that the state and markets undersupply. Despite widespread belief in the importance of private charity, most Americans donate little or nothing. Experiments in behavioral economics show that anonymity, not human nature, causes low contributions. Anonymity poses a particular challenge for charity because of the special character of the obligation. Charity is a disjunctive social norm, meaning the obligation is owed to ‘A or B or C or …’. Disclosure of each individual’s aggregate conduct is necessary for the effectiveness of any disjunctive social norm. To revitalize charity we propose a public registry where each taxpayer can voluntarily disclose the ratio between his charitable giving and income. The registry will clarify the social norm and increase average donations. We extend our analysis to pro bono legal services where a similar registry would encourage attorneys to volunteer

Renegotiation of Cash Flow Rights in the Sale of VC-Backed Firms

Incomplete contracting theory suggests that VC cash flow rights - including liquidation preferences - may be subject to renegotiation. Using a hand-collected dataset of sales of Silicon Valley firms, we find common shareholders do sometimes receive payment before VCs\u27 liquidation preferences are satisfied. However, such deviations tend to be small. We also find that renegotiation is more likely when governance arrangements, including the firm\u27s choice of corporate law, give common shareholders power to impede the sale. Our study provides support for incomplete contracting theory, improves understanding of VC exits, and suggests that choice of corporate law matters in private firms

The Role of Independent Directors in Startup Firms

This Article develops a new theory to explain the widespread use of independent directors in the governance of startup firms. Privately held startups often assign a tie-breaking board seat to a third-party independent director. This practice cannot be explained by the existing corporate governance literature, which relies on diffuse ownership and passive investment-features unique to the publicly traded firm. To develop an alternative theory, I model a financing contract between an entrepreneur and a venture capital investor. I show that allocating a tie- breaking vote to an unbiased thirdparty can prevent opportunistic behavior that would occur ifthe firm were controlled by its ehtrepreneur or VC investor. Rather than monitoring management, independent directors in a startup firm arbitrate disputes between entrepreneurs and investors. Consistent with my theory, empirical data from Silicon Valley startups illustrate several mechanisms entrepreneurs and VCs use to select an unbiased independent director. My analysis has implications for corporate law, as it suggests that heightened fiduciary protections could undermine the role of the independent director in startup firms

Carrots & Sticks: How VCs Induce Entrepreneurial Teams to Sell Startups

Venture capitalists (VCs) usually exit their investments in a startup via a trade sale. But the entrepreneurial team – the startup’s founder, other executives, and common shareholders – may resist a trade sale. Such resistance is likely to be particularly intense when the sale price is low relative to VCs’ liquidation preferences. Using a hand-collected dataset of Silicon Valley firms, we investigate how VCs overcome such resistance. We find, in our sample, that VCs give bribes (carrots) to the entrepreneurial team in 45% of trade sales; in these sales, carrots total an average of 9% of deal value. The overt use of coercive tools (sticks) occurs, but only rarely. Our study sheds light on important but underexplored aspects of corporate governance in VC-backed startups and the venture capital ecosystem

Charity and Information: Correcting the Failure of a Disjunctive Social Norm

Charitable donations fund social goods that the state and markets undersupply. Despite widespread belief in the importance of private charity, most Americans donate little or nothing. Experiments in behavioral economics show that anonymity, not human nature, causes low contributions. Anonymity poses a particular challenge for charity because of the special character of the obligation. Charity is a disjunctive social norm, meaning the obligation is owed to A or B or C or ... . Disclosure of each individual\u27s aggregate conduct is necessary for the effectiveness of any disjunctive social norm. To revitalize charity we propose a public registry where each taxpayer can voluntarily disclose the ratio between his charitable giving and income. The registry will clarify the social norm and increase average donations. We extend our analysis to pro bono legal services where a similar registry would encourage attorneys to volunteer

Renegotiation of Cash Flow Rights in the Sale of VC-Backed Firms

Incomplete contracting theory suggests that VC cash flow rights - including liquidation preferences - may be subject to renegotiation. Using a hand-collected dataset of sales of Silicon Valley firms, we find common shareholders do sometimes receive payment before VCs\u27 liquidation preferences are satisfied. However, such deviations tend to be small. We also find that renegotiation is more likely when governance arrangements, including the firm\u27s choice of corporate law, give common shareholders power to impede the sale. Our study provides support for incomplete contracting theory, improves understanding of VC exits, and suggests that choice of corporate law matters in private firms