Explaining the Variance in Underpricing among Venture Capital-Backed IPOs: A Comparison Between Private and Corporate VC Firms

Explaining the Variance in Underpricing among Venture Capital-Backed IPOs: A Comparison Between Private and Corporate VC Firms

In this study, we argue from the resource‐based view and multiple agency theory that private and corporate VC firms have different impacts on IPO underpricing among VC‐backed IPOs due to their different interests, motivations, and resources. Private VC firms are primarily financial oriented, but cor...

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Veröffentlicht in:Strategic entrepreneurship journal 2013-12, Vol.7 (4), p.331-342
Hauptverfasser: Wang, Xiaodan 'Abby', Wan, William P.
Format: Artikel
Sprache:eng
Schlagworte:
Agency theory
corporate VC
entrepreneurial ventures
Impact analysis
Initial public offerings
IPO underpricing
private VC
Stock prices
Studies
Venture capital
venture capital firms
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Zusammenfassung:In this study, we argue from the resource‐based view and multiple agency theory that private and corporate VC firms have different impacts on IPO underpricing among VC‐backed IPOs due to their different interests, motivations, and resources. Private VC firms are primarily financial oriented, but corporate VC firms generally are strategic in orientation. Using a sample of 200 VC‐backed IPOs from 2000 to 2007, we found support for the hypotheses that among VC‐backed IPOs, private VC ownership is positively associated with underpricing, whereas corporate VC ownership is negatively associated with underpricing. Copyright © 2013 Strategic Management Society.
ISSN:1932-4391
1932-443X
DOI:10.1002/sej.1163