1990
DOI: 10.1016/0304-405x(90)90064-7
|View full text |Cite
|
Sign up to set email alerts
|

The role of venture capital in the creation of public companies

Help me understand this report

Search citation statements

Order By: Relevance

Paper Sections

Select...
4
1

Citation Types

25
563
4
22

Year Published

2001
2001
2014
2014

Publication Types

Select...
5
2

Relationship

0
7

Authors

Journals

citations
Cited by 1,026 publications
(614 citation statements)
references
References 27 publications
25
563
4
22
Order By: Relevance
“…Private equity finance is well recognized in being strategically placed to provide capital to firms subject to extremely high asymmetric information, such as those with minimal track records at start-up (see Berger and Udell, 1998 for an extensive literature review). A key differentiating feature of private equity as opposed to investors simply seeking to derive benefits from diversification of risks associated with personal portfolios is in the level of active management and participation undertaken within portfolio investee firms (Barry et al, 1990). As such private equity financiers are best placed to provide superior monitoring and surveillance of investee firms and their management and thus have superior access to information otherwise either unavailable or prohibitively costly to obtain for more widely dispersed outsider investors.…”
Section: Introductionmentioning
confidence: 99%
See 2 more Smart Citations
“…Private equity finance is well recognized in being strategically placed to provide capital to firms subject to extremely high asymmetric information, such as those with minimal track records at start-up (see Berger and Udell, 1998 for an extensive literature review). A key differentiating feature of private equity as opposed to investors simply seeking to derive benefits from diversification of risks associated with personal portfolios is in the level of active management and participation undertaken within portfolio investee firms (Barry et al, 1990). As such private equity financiers are best placed to provide superior monitoring and surveillance of investee firms and their management and thus have superior access to information otherwise either unavailable or prohibitively costly to obtain for more widely dispersed outsider investors.…”
Section: Introductionmentioning
confidence: 99%
“…As such private equity financiers are best placed to provide superior monitoring and surveillance of investee firms and their management and thus have superior access to information otherwise either unavailable or prohibitively costly to obtain for more widely dispersed outsider investors. However while the certification of value (signalling theory) of private equity entities is well documented in the literature (see Barry et al (1990) and Bruton et al (2010)) there is conjecture as to the impact of this on IPO underpricing. In recognition of the superior monitoring role played by venture capitalists (VC), Barry et al (1990) argues that VC involvement in a firm leads to their maintaining a larger equity stake following the IPO with less underpricing than comparable non-VC backed firms.…”
Section: Introductionmentioning
confidence: 99%
See 1 more Smart Citation
“…These observations are supported by a great deal of recent empirical evidence about the segmentation of the market for shares (Barry et al 1990;Brennan and Franks 1995;Hanley and Wilhelm 1995;Holderness and Sheehan 1988;Pagano et al 1996;Rydqvist and Högholm 1994). This literature shows that firms manage the sale of shares with the purpose of discriminating between relatively small and passive investors and applicants for large blocks (Brennan and Franks 1995).…”
Section: Introductionmentioning
confidence: 75%
“…These VCs spend considerable time monitoring firm management before the IPO (Gompers 1995) because they have incentives to set strong governance structures in their portfolio firms (Hochberg 2006); this is known as the "monitoring effect." Moreover, as underlined by Lerner (1995) and by Barry et al (1990), VCs frequently retain a seat on the newly listed firm's board even after cashing out. Lerner argues that it might be expected that these firms will experience fewer agency problems because VCs are specialized providers of oversight.…”
Section: Description and Conceptual Analysis Of The Situationmentioning
confidence: 99%