We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Public Market Players in the Private World: Implications for the Going-Public Process.
- Authors
Huang, Shiyang; Mao, Yifei; Wang, Cong (Roman); Zhou, Dexin
- Abstract
We investigate the effect of pre-IPO investments by public market institutional investors (institutions) on the exit of venture capitalists (VCs). Results indicate that institutions' pre-IPO investments reduce IPO underpricing by mitigating VCs' reliance on all-star analysts to boost market liquidity. We conclude that institutions facilitate VC exits in the secondary market. Supporting this view, our analysis reveals that the presence of institutions allows VCs to exit with a reduced price impact in the secondary market. Consistent with the ease of exit, VCs offer fewer shares at the IPO and are more likely to invest in institutionally backed startups.
- Subjects
FINANCIAL markets; GOING public (Securities); INVESTMENTS; INSTITUTIONAL investors; VENTURE capital companies; MARKET exit
- Publication
Review of Financial Studies, 2021, Vol 34, Issue 5, p2411
- ISSN
0893-9454
- Publication type
Article
- DOI
10.1093/rfs/hhaa092