Are venture capital and buyout backed IPOs any different?

Buchner, Axel; Mohamed, Abdulkadir; Wagner, Niklas

doi:10.1016/j.intfin.2018.12.002

Cited by 15 publications

(5 citation statements)

References 33 publications

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“…Research on private equity (PE) and venture capital (VC) covers two definitions of PE, in the broad sense and the narrow sense (Buchner et al 2019;Harris et al 2020). PE in the broad sense refers to private equity, which means entities that invest in private companies, especially in the form of funds.…”

Section: Literature Reviewmentioning

confidence: 99%

“…At the same time, however, the study found that the effect of PE funding lasts longer than that of VC funding. Buchner et al (2019) compare PE-sponsored IPOs and VC-sponsored IPOs in the United States and report that VC-sponsored IPOs are significantly underpriced in the short run. On the other hand, in the long run, they find that PE-sponsored IPOs are superior to VC-sponsored IPOs in terms of return on assets and operating margin, suggesting that the improvement in post-IPO operating performance of PE-sponsored companies is fully included in the price at IPO.…”

Section: Literature Reviewmentioning

confidence: 99%

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A Study of Private Equity Rounds of Entrepreneurial Finance in EU: Are Buyout Funds Uninvited Guests for Startup Ecosystems?

Miyamoto

Mejía

Kajikawa

2022

JRFM

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This paper studies the difference between startup investments by private equity funds (buyout funds; PE) and venture capital funds (VC). PEs, which have traditionally invested in mature companies, have been increasingly investing in later-stage startups in recent years. Based on Crunchbase’s data on EU startup investments from 2011 to the first half of 2021, we find that: (1) later-stage VC-backed startups and PE-backed startups differ in terms of the industry domain, (2) PE-backed startups tend to have higher revenue when they receive investments, and (3) VC-backed startups are more likely to exit via Initial Public Offering (IPO) and slightly less likely to exit via Mergers and Acquisitions (M&A) than PE-backed startups. These results connect previous studies on VC and PE and deepen our understanding of later-stage startup investment. It also suggests that PE invests differently than VCs and provides new added value to the startup ecosystem. In addition, it adds insights into corporate behavior in new business domain expansion.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

A Study of Private Equity Rounds of Entrepreneurial Finance in EU: Are Buyout Funds Uninvited Guests for Startup Ecosystems?

Miyamoto

Mejía

Kajikawa

2022

JRFM

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show abstract

“…A contrary impact emerges in reaction in shock's standard deviation in financial stocks when these shocks deliver effective financial records. In the traditional financial experience, financial shrinking reduces output, financial market valuation & funding possibilities (Bhattacharya et al, 2020;Buchner, Mohamed & Wagner, 2019). It is affordable and expecting that such elements could deter organizations from successful community, particularly offered the multiplied risk aversion of capital financiers and restricted opportunities to capitalize in the initial public offering's takings.…”

Section: Introductionmentioning

confidence: 99%

Dynamics of Monetary Policy Impact on Initial Public Offering: Insights From the Pakistan Stock Exchange

Hussain,

Rasheed,

Mahmood

2023

JSSD

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This study explores heterochthonous monetary shocks' effect on the initial public offering market, employing excessive-frequency identity approach. Saengchote and Sthienchoak (2020) databank include 190 SBP official statement between 2001 and 2020. Modifications in 3-months fed futures, which can be negatively associated with Standard and Poor 500 within thirty-min window (15-minutes earlier, 15-minutes later) immediate SBP official statements, are categorized as traditional shocks. Contractionary shocks within the traditional logic cause a drop in the initial public offering undertaking. Opposed to, contractionary shocks that deliver the influential financial facts generate an upward thrust in initial public offering task. The setting apart traditional monetary shocks from state financial institution statistics shocks permits an ironic evaluation of monetary policies affecting initial public offering market. This study has added two major points to literature as it shows that monetary policy has impartial role in determining initial public offering market, also research shows that informational effect of financial shocks is as essential such as traditional effect in upsetting the initial public offering goings-on.

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“…First, although many dynamic entrepreneurial firms exist in China and many go public through IPOs every year, relatively few studies address the IE of newly listed firms or general entrepreneurial firms. Research in this vein includes Kim (1999), who investigates the effect of financing constrains (FC) on investment behavior before and after IPOs, and Buchner et al (2019), who examine the difference in the short- and long-term run performance of newly public firms backed by VC. This study examines how VC drives the IE of entrepreneurial firms from a financial resource allocation perspective, enhancing the literature on IE to a certain extent.…”

Section: Introductionmentioning

confidence: 99%

Striving to improve investment efficiency among Chinese firms: does the role of venture capital matter?

Wang

Ran

2022

CMS

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Purpose This study aims to investigate the impact of venture capital (VC) involvement on investment efficiency (IE) and its potential action mechanisms from the perspective of financial resource allocation. Design/methodology/approach Using data of Chinese firms between 2008 and 2020, and the propensity score matching–difference in differences method, the authors investigate the relationship between VC and IE. Findings The results show that VC involvement significantly promotes IE, and the effect exhibits an inverted U-shape dynamic over time. The authors find two mechanisms through which VC promotes IE: alleviating financing constraints and improving corporate governance. Supplementary tests indicate that VC institutions with high reputations play a significant role in enhancing IE; the promotion effect is more pronounced for firms in non-high-tech industries, firms facing higher industrial competition and firms located in areas with better property rights protection systems. Originality/value This study provides several original contributions. First, based on principal–agent and financing constraint theories, this study enhances the literature by revealing how VC drives the IE of newly public firms in China. Second, to the best of the authors’ knowledge, this is the first attempt to identify the mechanisms between VC and IE; Third, from an empirical perspective, besides discussing the average and dynamic effect of VC on IE, this study also explores the impact of the interaction between VC and market competition and property rights protection on IE.

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Are venture capital and buyout backed IPOs any different?

Cited by 15 publications

References 33 publications

A Study of Private Equity Rounds of Entrepreneurial Finance in EU: Are Buyout Funds Uninvited Guests for Startup Ecosystems?

A Study of Private Equity Rounds of Entrepreneurial Finance in EU: Are Buyout Funds Uninvited Guests for Startup Ecosystems?

Dynamics of Monetary Policy Impact on Initial Public Offering: Insights From the Pakistan Stock Exchange

Striving to improve investment efficiency among Chinese firms: does the role of venture capital matter?

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