Accounting & Management

- March 2025
- Case
Xfund and Sam Altman: Finding Harvard’s Best Generative AI Founders

By: Suraj Srinivasan

On May 1, 2024, Xfund Managing Partners Patrick Chung and Brandon Farwell, hosted a high-stakes venture pitch session designed to select one startup for a minimum $100,000 investment. This “Xperiment Stake” competition, dedicated to startups in the Generative AI sector, was particularly significant. The founders would pitch to Sam Altman, CEO of OpenAI. The competition attracted 270 total submissions, from which six promising founding teams were selected for the final one-on-one pitch session. Each of the six finalists presented their vision for applying Generative AI in diverse fields, including research, software development, and even military applications. With AI evolving rapidly, the challenge for Xfund was not just to evaluate the startups’ ideas, but also to identify the most innovative and adaptable founders—those capable of navigating and thriving in the fast-changing landscape. The stage was set for a tough decision: which startup should Altman and Xfund select as the standout candidate to secure the investment?
- March 2025
- Case
Xfund and Sam Altman: Finding Harvard’s Best Generative AI Founders

By: Suraj Srinivasan

On May 1, 2024, Xfund Managing Partners Patrick Chung and Brandon Farwell, hosted a high-stakes venture pitch session designed to select one startup for a minimum $100,000 investment. This “Xperiment Stake” competition, dedicated to startups in the Generative AI sector, was particularly significant. The founders would pitch to Sam Altman, CEO of...
- March 2025
- Case
Forecasting at CAVA Group Inc.

By: Joseph Pacelli
- March 2025
- Case
Forecasting at CAVA Group Inc.

By: Joseph Pacelli
- 2025
- Working Paper
Centralized Governance in Decentralized Organizations

By: Lin William Cong, Daniel Rabetti, Charles C.Y. Wang and Yu Yan

We systematically document governance centralization in decentralized autonomous organizations (DAOs) and study its drivers and economic implications. Using multiple data sources and granular on-chain transactional data, we compare our findings to those in corporate finance (and venture startup) settings, to derive several key insights. Unlike traditional firms, DAOs, including most Decentralized Finance (DeFi) projects, have lower participation rates and more concentrated voting power. Moveover, these governance features result in blockvoters controlling 76.2% of the voting power in decisions. Examining the economic implications of centralization, we observe significant abnormal trading activity around governance proposals. Analyzing trading behavior, we show that while blockvoters focus on influencing governance outcomes, proposal managers engage in insider trading—yielding an average market-adjusted return of 9.5%. The combination of concentrated voting power and insider trading can be value-destroying in the long run, particularly during times of crisis when governance becomes central to the survival of business organizations.
- 2025
- Working Paper
Centralized Governance in Decentralized Organizations

By: Lin William Cong, Daniel Rabetti, Charles C.Y. Wang and Yu Yan

We systematically document governance centralization in decentralized autonomous organizations (DAOs) and study its drivers and economic implications. Using multiple data sources and granular on-chain transactional data, we compare our findings to those in corporate finance (and venture startup) settings, to derive several key insights. Unlike...

About the Unit

The Accounting & Management unit at Harvard Business School strives to be the worldwide leader in research, course development, and teaching on top managements' use of performance measurement systems to:

Communicate with external investors to ensure that their firms' securities are fairly priced and that they are able to access capital,
Measure and evaluate their firms' economic performance,
Improve resource allocation and strategy implementation within their firms, and
Build accountability for performance through effective external and internal governance.

Unit research, course development, and teaching fall into two broad areas: Financial Reporting and Analysis and Management Accounting. Our research helps scholars and educators understand current best practices for the design and use of performance measurement systems that help managers to build more effective, value-creating organizations. Our teaching materials enable us to bring the results of this research into the classroom, and to practice.

Recent Publications

Xfund and Sam Altman: Finding Harvard’s Best Generative AI Founders

By: Suraj Srinivasan

March 2025 |
Case |
Faculty Research

On May 1, 2024, Xfund Managing Partners Patrick Chung and Brandon Farwell, hosted a high-stakes venture pitch session designed to select one startup for a minimum $100,000 investment. This “Xperiment Stake” competition, dedicated to startups in the Generative AI sector, was particularly significant. The founders would pitch to Sam Altman, CEO of OpenAI. The competition attracted 270 total submissions, from which six promising founding teams were selected for the final one-on-one pitch session. Each of the six finalists presented their vision for applying Generative AI in diverse fields, including research, software development, and even military applications. With AI evolving rapidly, the challenge for Xfund was not just to evaluate the startups’ ideas, but also to identify the most innovative and adaptable founders—those capable of navigating and thriving in the fast-changing landscape. The stage was set for a tough decision: which startup should Altman and Xfund select as the standout candidate to secure the investment?

Keywords: AI and Machine Learning; Venture Capital; Innovation Leadership; Technological Innovation; Technology Industry; United States

Citation

Educators

Stagwell: AI and the Future of Marketing

By: Suraj Srinivasan and Radhika Kak

March 2025 |
Case |
Faculty Research

In early 2025, Mark Penn, Founder, CEO and Chairman of Stagwell, a global marketing company with a network of over 70+ agencies that served over 4000 blue-chip customers across 40 countries, was looking at ways that marketers should navigate the disruption emanating from technological advances, in particular, the advent of artificial intelligence. AI technology was enabling marketers to reach consumers through new, highly targeted and personalized experiences. Marketing agencies were adding tech-enabled creative tools to their toolkit to meet changing client demands. As the kind of infrastructure and skills needed was changing fast, agencies were undertaking significant internal digital transformation and change management. The nature and role of creativity in advertising and marketing was undergoing transformation. Stagwell’s network of agencies were rapidly incorporating AI into their activities. Stagwell Marketing Cloud, new company’s SaaS platform was helping the business build a new model of service delivery to its clients. An agentic AI framework, combined with AI-driven functionalities in market research, audience insight generation, creative output generation, optimization, and brand tracking could significantly augment the capabilities of human teams. How could SMC create a more powerful agency model where AI and human expertise worked together? Could there be a fully autonomous advertising agency that could manage the end-to-end of a campaign? Stagwell needed to make the right strategic investments to ensure it kept abreast of global technological developments and ensure that the quality of creative output moved in lock-step alongside technology adoption.

Keywords: Marketing; Advertising; Retention; Innovation Strategy; Advertising Industry; Technology Industry

Citation

Educators

Harvey: AI for Lawyers

By: Suraj Srinivasan, Charles Krumholz and Radhika Kak

March 2025 |
Case |
Faculty Research

In early 2025, Winston Weinberg and Gabe Pereyra, co-founders of Harvey AI, reflected on the company’s meteoric rise as a pioneer in AI-powered legal technology. Since its founding in 2022, Harvey had transformed how lawyers approached research, drafting, and document analysis, securing major law firms and corporate legal teams as clients. By early 2025, Harvey had surpassed $50 million in annual recurring revenue (ARR), expanded its global footprint to 235 enterprise customers, and achieved a $3 billion valuation. Despite its rapid growth, Harvey faced pivotal strategic questions. The legal technology industry was becoming increasingly competitive, with both legacy players integrating AI into their offerings and new startups emerging with specialized solutions. While Harvey had successfully focused on aggressive customer acquisition, retention was now the key challenge. Could it deepen engagement with existing clients through enhanced technology integration and workflow automation? Should it expand beyond its core offerings into new legal technology verticals? And how could it balance product innovation with scaling its enterprise customer base? As Weinberg and Pereyra weighed their options, they remained committed to their ambitious vision: building an autonomous AI legal agent capable of handling end-to-end legal work. But as Harvey navigated the evolving landscape of AI-powered professional services, they had to ask—what was the best path forward to sustain growth, ensure defensibility, and cement Harvey’s leadership in the legal AI revolution?

Keywords: Innovation Strategy; New York (city, NY); San Francisco; London

Citation

Educators

Purchase

Haidilao: Changing your Future with your Own Hands

By: Yuan Zou and Dennis Campbell

March 2025 |
Supplement |
Faculty Research

Citation

Purchase

Forecasting at CAVA Group Inc.

By: Joseph Pacelli

March 2025 |
Case |
Faculty Research

Citation

Educators

Centralized Governance in Decentralized Organizations

By: Lin William Cong, Daniel Rabetti, Charles C.Y. Wang and Yu Yan

2025 |
Working Paper |
Faculty Research

We systematically document governance centralization in decentralized autonomous organizations (DAOs) and study its drivers and economic implications. Using multiple data sources and granular on-chain transactional data, we compare our findings to those in corporate finance (and venture startup) settings, to derive several key insights. Unlike traditional firms, DAOs, including most Decentralized Finance (DeFi) projects, have lower participation rates and more concentrated voting power. Moveover, these governance features result in blockvoters controlling 76.2% of the voting power in decisions. Examining the economic implications of centralization, we observe significant abnormal trading activity around governance proposals. Analyzing trading behavior, we show that while blockvoters focus on influencing governance outcomes, proposal managers engage in insider trading—yielding an average market-adjusted return of 9.5%. The combination of concentrated voting power and insider trading can be value-destroying in the long run, particularly during times of crisis when governance becomes central to the survival of business organizations.

Keywords: Governance

Citation

Unwinding Loan Prospecting Pressure Through Renegotiation: The Role of Loan Officer Changes in Debt Contracting

By: Jung Koo Kang, Regina Wittenberg Moerman and Jessie Cheong

2025 |
Working Paper |
Faculty Research

We examine the impact of loan officer changes on debt contract design. Loan officers play a critical role in initiating and maintaining lending relationships but also face pressure to originate more loans, incentivizing them to offer loan terms more favorable than warranted by borrowers’ creditworthiness. Because a new loan officer is not subject to this loan prospecting pressure, we predict that she reverses the favorable discretion granted at loan origination. Using a loan renegotiation setting, we find that borrowers are more likely to obtain unfavorable renegotiation outcomes when a new loan officer conducts the renegotiation. This effect is more pronounced when loan prospecting pressure is greater at loan origination—when the loan officer is less experienced, when the lead arranger is a non-relationship lender or faces lower income growth, and when credit market competition is higher. We provide novel insights into how loan officer changes restore contracting efficiency through renegotiations.

Citation

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Limited Accountability and Awareness of Corporate Emissions Target Outcomes

By: Xiaoyan Jiang, Shawn Kim and Shirley Lu

March 2025 |
Article |
Nature Climate Change

Firms are increasingly announcing targets to reduce their carbon emissions, but it is unclear whether firms are held accountable for these targets. Here we examine emissions targets that ended in 2020 to investigate the final target outcomes, the transparency of target outcomes and potential consequences for missed emissions targets. A total of 1,041 firms had emissions targets ending in 2020, of which 88 (9%) failed and 320 (31%) disappeared. We find limited accountability and low awareness of the target outcomes. Only three of the failed firms are covered by the media. After a firm fails its 2020 emissions target, we do not observe significant market reaction, changes in media sentiment, environmental scores and environment-related shareholder proposals. In contrast, initial announcements of these 2020 emissions targets are rewarded with significant improvements in media sentiment and environmental scores. Our findings raise concerns for the accountability of emissions targets ending in 2030 and 2050.

Keywords: Carbon Emissions; Goals and Objectives; Corporate Social Responsibility and Impact; Corporate Accountability; Environmental Sustainability; Public Opinion

Citation

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