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 The performance of venture capital funds and VC backed IPOs written by Stanley Lou Weng Hong and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

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 How Venture Capital Works written by Phillip Ryan and published by The Rosen Publishing Group, Inc. This book was released on 2012-07-01 with total page 82 pages. Available in PDF, EPUB and Kindle. Book excerpt: Explanations to the inner workings of one of the least understood, but arguably most important, areas of business finance is offered to readers in this engaging volume: venture capital. Venture capitalists provide necessary investment to seed (or startup) companies, but the startup is only the beginning, there is much more to be explored. These savvy investors help guide young entrepreneurs, who likely have little experience, to turn their businesses into the Googles, Facebooks, and Groupons of the world. This book explains the often-complex methods venture capitalists use to value companies and to get the most return on their investments, or ROI. This book is a must-have for any reader interested in the business world.

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 After Market Performance of Venture backed and Non Venture backed IPOs written by Suzanne Adulrazzak Charbaji and published by . This book was released on 2011 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effect of Venture Capital (VC) reputation on the three year aftermarket performance of its invested IPO firms. A sample of 3,220 U.S. Initial Public Offerings (IPOs) firms for the 1990-2005 period is used to test the hypotheses. To measure the VC reputation effect, I use two proxies which are: number of companies taken public by the VC and the age of the VC. The findings of the paper show that VC-backed firms perform better than non VC-backed firms in the first, second and third year of issuance. Also, reputable VC-backed firms perform better than average VC-backed ones in the second and third year of issuance. The findings confirm the VC effect and the VC reputation effect on the long run after market performance of IPO firms.

Download or read book The Venture Capital Cycle written by Paul Alan Gompers and published by MIT Press. This book was released on 2004 with total page 592 pages. Available in PDF, EPUB and Kindle. Book excerpt: An analysis of the venture capital process, from fund-raising through investing to exiting investments; a new edition with major revisions and six new chapters that reflect the latest research.

Download or read book Venture Capital and Firm Performance written by Jaeho Lee and published by Routledge. This book was released on 2017-08-15 with total page 302 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides an analysis of the impact on underpricing and long-term performance of venture capital in IPOs, and of the ownership characteristics of venture capital companies. It investigates the performance of IPOs in Korea during the dot-com bubble-and-bust period. The book looks at venture capital firms and their participation, their reputation, and conflicts of interests, particularly in the context of the development of a new secondary stock market in an emerging market and these factors affect the pricing and performance effects of IPO firms. This book is a useful reference to those interested in promoting an active KOSDAQ type of stock market, and understanding how venture capitalists and their institutional affiliation may reduce information asymmetry and add value of IPO firms.

Download or read book The Performance and Relationship Between Venture Capitalists and Venture capital backed IPOs written by Tieh Shang Jin and published by . This book was released on 2008 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Venture Capital and the Finance of Innovation written by Andrew Metrick and published by John Wiley and Sons. This book was released on 2011-06-15 with total page 1153 pages. Available in PDF, EPUB and Kindle. Book excerpt: This useful guide walks venture capitalists through the principles of finance and the financial models that underlie venture capital decisions. It presents a new unified treatment of investment decision making and mark-to-market valuation. The discussions of risk-return and cost-of-capital calculations have been updated with the latest information. The most current industry data is included to demonstrate large changes in venture capital investments since 1999. The coverage of the real-options methodology has also been streamlined and includes new connections to venture capital valuation. In addition, venture capitalists will find revised information on the reality-check valuation model to allow for greater flexibility in growth assumptions.

Download or read book Venture Capital written by Douglas Cumming and published by John Wiley & Sons. This book was released on 2010-04-29 with total page 604 pages. Available in PDF, EPUB and Kindle. Book excerpt: An essential guide to venture capital Studies have shown that venture capital backed entrepreneurial firms are on average significantly more successful than non-venture capital backed entrepreneurial firms in terms of innovativeness, profitability, and share price performance upon going public. Understanding the various aspects of venture capital is something anyone in any industry should be familiar with. This reliable resource provides a comprehensive view of venture capital by describing the current state of research and best practices in this arena. Issues addressed include sources of capital-such as angel investment, corporate funds, and government funds-financial contracts and monitoring, and the efficiency implications of VC investment, to name a few. Opens with a review of alternative forms of venture capital Highlights the structure of venture capital investments Examines the role venture capitalists play in adding value to their investee firms This informative guide will help you discover the true potential of venture capital.

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 Venture Capital and Initial Public Offering written by Weicheng Wang and published by . This book was released on 2010 with total page 99 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Measuring Entrepreneurial Businesses written by John Haltiwanger and published by University of Chicago Press. This book was released on 2017-09-21 with total page 488 pages. Available in PDF, EPUB and Kindle. Book excerpt: Measuring Entrepreneurial Businesses: Current Knowledge and Challenges brings together and unprecedented group of economists, data providers, and data analysts to discuss research on the state of entrepreneurship and to address the challenges in understanding this dynamic part of the economy. Each chapter addresses the challenges of measuring entrepreneurship and how entrepreneurial firms contribute to economies and standards of living. The book also investigates heterogeneity in entrepreneurs, challenges experienced by entrepreneurs over time, and how much less we know than we think about entrepreneurship given data limitations. This volume will be a groundbreaking first serious look into entrepreneurship in the NBER's Income and Wealth series.

Download or read book Venture Capitalist Involvement and the Long Run Performance of Ipos written by Terry L. Campbell and published by . This book was released on 2006 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The long-run underperformance of initial public offerings (IPOs) is a well documented anomaly. Recent research has shown that venture-backed IPOs, generally defined, marginally outperform non venture-backed IPOs and posits that venture capitalists (VCs) may add value through a variety of methods. We investigate the relation between the degree of involvement by VCs and the long-run performance of IPOs. Overall, while we do not find significant differences in long-run performance between VC-backed and non VC-backed firms, we find a positive relation between the degree of VC involvement and long-run performance. Specifically, we find a positive relationship between the proportion of monitoring directors (VC and independent outside directors) and long-run performance, evidence consistent with VCs shaping the board to increase monitoring. Further, it appears that VC-backed firms are able to reduce asymmetric information through attracting analysts and large shareholders thus improving long-run performance. Our results suggest that the long-run underperformance of IPOs may be driven in part by those firms with none or low degrees of VC involvement.

Download or read book Post IPO Performance of Venture Capital Backed Firms written by Severin Stefanini and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The following bachelor thesis examines the influence of venture capital backing on the post-initial public offering performance of respective portfolio firms. Thus, the study analyzes potential differences in company development between venture capital backed firms and entities that used other financing structures during the pre-initial public offering period. It is assumed that venture capital backed IPOs perform better in the immediate after-market due to the ability of venture capitalists to reduce costs of going public. Furthermore, they are presumed to achieve superior long- run performance when compared to non-venture capital backed companies. T-statistics as well as cross-sectional regression results find no statistically significant influence of venture capital backing on initial returns and gross spread rates. However, long-term results show that firms backed by venture capitalists, indeed, realize larger total as well as comparative rates of return. In particular, differences in performance over a two- respectively three-year period after the offering were found to be statistically significant.

Download or read book The Oxford Handbook of Venture Capital written by Douglas Cumming and published by Oxford University Press. This book was released on 2012-04-20 with total page 1126 pages. Available in PDF, EPUB and Kindle. Book excerpt: Venture capital (VC) refers to investments provided to early-stage, innovative, and high growth start-up companies. A common characteristic of all venture capital investments is that investee companies do not have cash flows to pay interest on debt or dividends on equity. Rather, investments are made with a view towards capital gain on exit. The most sought after exit routes are an initial public offering (IPO), where a company lists on a stock exchange for the first time, and an acquisition exit (trade sale), where the company is sold in entirety to another company. However, VCs often exit their investments by secondary sales, wherein the entrepreneur retains his or her share but the VC sells to another company or investor buybacks, where the entrepreneur repurchases the VC`s interest and write-offs (liquidations). The Oxford Handbook of Venture Capital provides a comprehensive picture of all the issues dealing with the structure, governance, and performance of venture capital from a global perspective. The handbook comprises contributions from 55 authors currently based in 12 different countries.