Keywords
venture capital backing, IPO performance, manufacturing firm survivability
Abstract
We examine a set of small, venture capital (VC)-backed manufacturing firms and compare it to a control sample of nonVC-backed manufacturing firms going public between 1990 and 1996. We use the degree of underpricing, three-year sales growth, three-year cumulative stock return, and three-year survivability as measures of success. First, we test if the presence of VC backing results in significant differences in success between the two samples. Next, we test if certain VC and deal characteristics are discriminators within the VC-backed sample of firms. Despite previous literature, which argues for either inferior or superior VC post-initial public offering (IPO) performance, these tests indicate no significant differences between VC- and nonVC-backed firms. Additionally, it is found that VC and deal characteristics are not discriminating factors within the VC sample.
Original Publication Citation
Do Venture Capitalists Add Value to Small Manufacturing Firms? An Empirical Analysis of Venture and Non-Venture Capital Backed Initial Public Offerings, with Richard Brown and Jerry Osteryoung, Journal of Small Business Management, Vol. 42, No. 1, 2004, 78-92.
BYU ScholarsArchive Citation
Brau, James C.; Brown, Richard A.; and Osteryoung, Jerome S., "Do Venture Capitalists Add Value to Small Manufacturing Firms? An Empirical Analysis of Venture and Nonventure Capital-Backed Initial Public Offerings" (2004). Faculty Publications. 9162.
https://scholarsarchive.byu.edu/facpub/9162
Document Type
Peer-Reviewed Article
Publication Date
2004
Publisher
Journal of Small Business Management
Language
English
College
Marriott School of Business
Department
Finance
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