Download or read book The Impact of Venture Ecapital on Post IPO Operating Performance and Related Aspects of Firm Behavior written by Sam Mensah and published by . This book was released on 1994 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Impact of venture capital on post IPO operating performance and related aspects of firm behavior written by Sam Mensah and published by . This book was released on 1994 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Venture Capital Firm s Reputation Effect on Its Start up Company s Long Term Operating Performance and Survivorship written by and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, I tested the effects of three proxies for venture capitalist(VC) reputation on its invested company's long term industry-djusted operating performances (ROA, ROE), market-to-book ratio and survival time (time to delisting) in the aftermarket. VC's market share and VC's IPO share have strong and positive association with the post-IPO long-term performance metrics, and the effects are statistically significant even after accounting for self-selection bias. For long term survivorship of start-up companies, I applied hazard analysis to the IPO company's time to delisting with accelerated failure time (AFT) model as the baseline hazard function, and found that start up companies with backing from higher VC's market share and VC's IPO share VC firms tend to have lower hazard rate of de-listing. The expected time to delisting is also found to be much shorter in the pre-technology bubble period (1985-1996) compared to during and posttechnology bubble period (1997-2007) for higher than median value reputable VCs. As the findings are robust even after controlling for business expansion and contraction cycles, this lend credence to the idea that during the technology bubble period, over 4 optimism in VCs and too much uncommitted capital chasing after too few quality deals have resulted in reputable VC investing in mediocre quality companies. By cross-testing the effects of different quartiles of VC reputation proxy rankings on the long-run survivorship of the companies, VC market share is found to be the most consistent and effective amongst the proposed VC reputation proxies in explaining its effect on the IPO companies' long-run survival.

Download or read book IPOs of Venture Capital Backed Ventures written by Christian Mehrer and published by GRIN Verlag. This book was released on 2003-11-02 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Studienarbeit aus dem Jahr 2002 im Fachbereich BWL - Investition und Finanzierung, Note: 1,3, European Business School - Internationale Universität Schloß Reichartshausen Oestrich-Winkel (-), Veranstaltung: Seminar des Wahlpflichtfaches Finanzierung und Banken, Sprache: Deutsch, Abstract: The topic of this paper is the difference of venture capital (VC) backed initial public offerings (IPOs) and non backed IPOs and the share price performance of the companies after the IPO. Compared to non-backed IPOs, VC backed IPOs consist on average of younger and less profitable firms. Nevertheless, VC backed companies have better underwriters, more institutional investors and less underpricing (i.e. a discount on the initial share price due to asymmetrical information). It is therefore considered that the venture capitalist (VCist) has an important impact on the share price performance of the young firm due to his certification role. By screening and mentoring the backed venture in earlier stages of the VC cycle, he can well assess the business’ opportunities. Thus, if he invests in the venture and keeps shares after the IPO, he can proof credibility to other investors (credibility hypothesis). However, younger VCists tend to bring companies too quickly to the stock markets, because they need an IPO for building up a reputation (grandstanding hypothesis). This may be adverse to the venture. Our findings also outline that there is no clear advantage of VC-backed firms on the long-run. Thus, we conclude that it is not only important to think about a VC backing, but also about the VCist that is backing. Choosing the wrong VCist may even have a negative impact on the company’s future.

Download or read book Post Ipo Operating Performance Venture Capitalists and Market Timing written by Jerry Coakley and published by . This book was released on 2004 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyse the post-issue operating performance of 304 venture-backed and 264 non-venture UK IPOs 1985-2000. IPOs exhibit a significant five-year, post-issue operational decline over the full sample period. However this is driven by a particularly poor performance by venture-backed and non-venture IPOs during the 1998-2000 bubble while underperformance by both is insignificant 1985-1997. Cross-section regression results indicate a significantly positive relationship between post-IPO operating performance and venture capitalist certification 1985-1997 and a negative relationship with initial returns 1998-2000. We conclude that the bubble period points to the influence of both market timing and investor sentiment on long run operating performance.

Download or read book Venture Capitalist Participation and the Performance of IPO Firms written by Georg Rindermann and published by Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften. This book was released on 2004 with total page 226 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates whether venture capitalists in Europe have a positive impact on the operating and long-run market performance of firms they bring public. To examine this issue a hand-collected international data set of venture- and non venture-backed IPOs at the French Nouveau Marché, German Neuer Markt, and British techMARK dating from 1996 to 1999 is used. The findings suggest that there are substantial variations in the experience and sophistication of venture capitalists. Moreover, venture-backed IPOs do not generally outperform non venture-backed issues, irrespective of the applied performance measure. Instead, merely the more experienced international venture capitalists appear to have positive effects on both the operating and market performance of portfolio firms. The overall results are interpreted as evidence for the heterogeneity of venture capitalists operating in the European market.

Download or read book Operating Performance of PE backed IPOs written by Fotios Diamantis and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Using data from Thompson One, Compustat and Bloomberg, this paper examines the relationship between Buyout and Venture Capital backing and accounting measured post-IPO operating performance of issue companies. The paper also compares this performance with companies that undergo IPOs but are not backed by financial sponsors. The sample consists of 1,790 IPOs in the US that breaks down to 816 Sponsor-backed and 974 Not-backed IPOs from 1998 to 2014. The results indicate that Buyout firms are significantly larger in size, more profitable, more efficient and carry larger amounts of debts as a percentage of assets before and after the IPO comparing to other IPOs. To the contrary, VC-backed firms are less profitable, less efficient and less indebted than the group of Not-backed firms. With the use of cross-section regressions, we find a positive relationship between PE certification and post-IPO performance changes that is only consistently significant in the long-term and in normal markets periods.

Download or read book The Effect of Venture Capital Backing on the Top Management Quality of Entrepreneurial Firms and Implications for Initial Public Offerings written by Thomas J. Chemmanur and published by . This book was released on 2017 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: We make use of hand-collected data on a large sample of entrepreneurial firms to analyze the effect of venture capital (VC) backing on the management quality of firms going public and the effect of both VC-backing and management quality on IPO variables. We hypothesize that VC-backing will be associated with higher management quality. We further hypothesize that both higher management quality and VC-backing will reduce the extent of asymmetric information facing firms going public, allow firms to go public earlier, yield higher IPO and immediate after-market firm valuations, and improve post-IPO operating performance. Our empirical findings support the above hypotheses.

Download or read book The Post Issue Operating Performance of IPO Firms written by Bharat A. Jain and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the change in operating performance of firms as they make the transition from private to public ownership. It documents a significant decline in operating performance subsequent to the initial public offering (IPO). Additionally, it finds a significant positive relation between post-IPO operating performance and equity retention by the original entrepreneurs but does not find any relation between post-IPO operating performance and the level of initial underpricing. Post-Issue declines in the market-to- book ratio, P/E ratio and the earnings per share are also documented.

Download or read book Venture Capital Investment and the Post IPO Performance of Entrepreneurial Firms written by Di Guo and published by . This book was released on 2016 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the effects of venture capital (VC) investment on the performance (measured by return on assets, return on equity, and Tobin's Q) and growth (measured by growth of total sales and total number of employees) of entrepreneurial firms in the People's Republic of China (PRC) after an initial public offering (IPO). Firm-level panel data analysis shows that VC investment contributes to the long-term performance and growth of entrepreneurial firms after an IPO. Meanwhile, we observe a significant and positive relationship between corporate governance of firms and VC investment. However, we do not find that experience or specialization of VC firms influences the effects of venture investment on post-IPO performance or growth of entrepreneurial firms in the PRC.

Download or read book Venture Capital Nature Impact on the Performance of IPOs in the Financial Industry written by Wael Mohamad Said El-Bsat and published by . This book was released on 2008 with total page 90 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides new insights into the effect of the VC nature impact on the IPO performance by analyzing a sample of 153 U.S. financial institutions that we nt public between 1993 and 2005. The proxy of performance is considered the cumu lative abnormal returns for one, two, and three year periods following the IPO d ate excluding the first 4 trading days. The abnormal returns are adjusted by the NASDAQ Banking Index return. Our results show that the VC nature impact on the financial institutions (FI) lo ng-term performance post to their IPO is quite different. In general, the VC-bac ked IPOs outperform the non-backed IPOs, which is consistent with the value-adde d theory [Brander, (2000, 2002)]. The standalone VCs are able to create better v aluation to backed IPOs compared to syndicated VCs for the CAR1 and CAR2, which is consistent with the selection hypothesis [Lerner (1994)]. The positive impact of a FVC on the post-IPO performance of a FI is found to be higher than those of both non-financial VC-backed (NFVC) and non-VC-backed firms for the CAR1 and CAR2. FVC and NFVC have different set of objectives, different strategies, and different level of expertise in the financial issues, leading t o differences in the value-added contribution that they provide. Moreover, the studied FVC syndication issue and obtained results from ordinary l east squares regressions indicate a positive association of both syndicated FVCs and standalone FVC on the FI long-run performance. However, the positive abnorm al return of the standalone FVC-backed firms is found to be significantly higher than that of a syndicated FVC for CAR1 and CAR2, which is consistent with the s election hypothesis [Lerner, (2004)]. Furthermore, the reached empirical findings suggest that the interaction of the FVC syndication with the financial sub-sector membership between the VC and the IPO firm provides an even better valuation and post-IPO performance for the CAR1 only. This interaction revealed that the best performer in the VC-backing field is found to be a standalone FVC backing a financial IPO that is operating in th e same financial sub-sector, which is consistent in its first part with the sele ction theory, and in its second part with the value-added theory. Operating in t he same financial sub-sector, the portfolio of standalone FVC has a better ...

Download or read book The Impact of Insider Ownership Stake Changes at the IPO and Earnings Management on Post IPO Operating Performance written by Alex Leum Han and published by . This book was released on 2010 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Past academic research reports that post-IPO operating performance can be signaled through or explained by company characteristics in a period immediately preceding or following the IPO. This paper examines whether post-IPO operating performance is correlated with earnings management activities immediately preceding and following the IPO, insider ownership retention rates after the IPO, and percentage of insider ownership changes at the IPO. I also test whether aggressive earnings managers experience worse operating performance measured by operating income over total assets than conservative earnings managers. The results from various regression analyses and t-tests in this paper show that earnings management activities immediately preceding and following the IPO and insider ownership retention rates are not correlated with post-IPO operating performance. However, this paper reports a statistically negative relationship between percentage of insider ownership changes at the IPO and post-IPO operating performance in the issue year.

Download or read book Post Ipo Performance and the Exit of Venture Capitalists written by Tilo Kraus and published by . This book was released on 2003 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: We test several implications of venture capital investment for the post-IPO performance of firms using data of 312 IPOs on Germany's Neuer Markt. Through tighter corporate control, third party certification and a reduced heterogeneity of opinions companies financed by Venture Capital firms might outperform their counterparties in the aftermarket of an IPO. However, this positive effect of VC backing on aftermarket performance could be reversed when Venture Capitalists seek exit from their investment. The discontinuation of a blockholder's exercised corporate control, signalling of insider knowledge as well as possible downward sloping demand curves provide an analytical framework that explains why the return series of VC backed IPOs might show a significant breakpoint at the time when Venture Capitalists exit from their investments. Our empirical evidence suggests that the expiration of lock-up periods as the earliest possible point of time for an exit represents such as breakpoint as Venture Capital backed IPOs outperform their counterparts before, but underperform around and after the expiration.

Download or read book Pre IPO Firm Performance and Corporate Governance of U S IPO Firms written by Marie-Claude Morin and published by . This book was released on 2003 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Corporate Venture Capital written by Vladimir Ivanov Ivanov and published by . This book was released on 2004 with total page 290 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Corporate Governance Professionalisation and Performance of IPO Firms written by Rolf Christian Thiess and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Combining agency theory and the resource-dependence perspective as well as signalling theory, this thesis examines the role venture capitalists (VCs) and founders play with respect to both structural board characteristics and board capital in terms of experience and prestige and whether these are linked to performance. It claims that VCs and founders shape the governance system of the firms going public and are influential in the professionalisation of the ventures especially in terms of human and social capital of its board of directors. It also argues that the board of directors represents a signal of firm quality in the initial public offering (IPO) market and should thus be linked to performance. Similarly, according to the venture capital certification hypothesis, being funded by VCs signals a firm's quality and potential. In order to assess these claims, this thesis employs a unique sample of matched venturecapital- backed and non-venture-capital-backed entrepreneurial IPOs that floated either on the London Stock Exchange's Official List or the Alternative Investment Market (AIM). Extending previous research this thesis employs more fine-grained measures and introduces new conceptually relevant variables in the analysis. The findings indicate that VCs and founders are influential in shaping corporate governance of IPO-stage ventures both from an agency and resource-provision perspective. Findings from the examination of governance and professionalisation characteristics with respect to IPO short-run performance (underpricing) indicate that it may the involvement of prestigious auditors that signal firm quality while a founder bias discount seems to exist. While evidence is found that VC involvement (and to a lesser extent director/board characteristics) is related to post-IPO market performance, this seems to depend on the time period following the IPO examined, whereas auditor prestige shows a positive association in all of these time periods.

Download or read book Assessing the Venture Capital Legacy written by Andrew Carl Cochran and published by . This book was released on 2009 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt: While extensive literature documents the venture capital impact around the initial public offering, little is known about the enduring effects of venture financing. This paper follows the post-IPO performance of venture-backed U.S. firms in different IPO cohorts from 1970 to 2006, and measures the duration of any venture capital advantages after the IPO. Venture capital strongly correlates with higher R & D and market-to-book ratios ("q"), and venture-backed firms grow faster and perform better particularly in high-tech industries. This apparent advantage for venture-backed firms remains for years following the IPO.