- Consulting Editors
- The Capital Flow from Institutional Investors to Entrepreneurs
- Venture Capital and the Financial Crisis: An Empirical Study across Industries and Countries
- Venture Capital Reputation
- Keys to Fundraising Success in Nascent Venture Capital Firms
- Corporate Venture Capital in the Twenty-First Century: an Integral Part of Firms' Innovation Toolkit
- Corporate Venture Capital: From Venturing to Partnering
- Vipe Financing: Venture (Capital) Investments in Public Equity
- Philanthropic Venture Capital From A Global Perspective: Definition and Investment Strategy
- Venture Capital Before The First Dollar: Deal Origination, Screening, and Evaluation
- Capital Structure Determinants In Growth Firms Accessing Venture Funding
- Venture Capital Staging: Domestic Versus Foreign Vc-Led Investments
- Follow-On Financing of Venture Capital–Backed Companies
- Performance Implications of Venture Capital Syndication Networks
- Valuing Common and Preferred Shares in Venture Capital Financing
- Required Rates of Return and Financial Contracting for Entrepreneurial Ventures
- Financial Contracting in U.S. Venture Capital: Overview and Empirical Evidence
- Time-Inconsistent Preferences and Venture Capital Contracting
- Syndication of Vc Investments, Governance, and Contract Design
- Venture Capital in Germany: The Role of Venture Capital Firms' Experience, Ownership Structure, and Agency Problems
- Venture Capital Law Firms: An Analysis of Equity Investments and Networks
- From Ideas to Products: Financing Innovation and Getting Access to Innovation
- The Impact of Venture Capital on Innovation
- What Drives the Top Line?: Determinants of Sales Revenue in Private Venture–Backed Firms
- Value Added by Angel Investors through Postinvestment Involvement: Exploratory Evidence and Ownership Implications
- The Impact of Venture Capital on the Long-Term Performance of IPO Firms: Evidence from Korea
- Regional Impact of Venture Capital
- Spread, Scope, and Scale in Venture Capital Globalization: A Clustered Globalization Model
- The Development of Venture Capital: Macroeconomic, Political, and Legal Determinants
- A Comparative Analysis of Venture Capital Investment In the United States and Europe
- The Role of Geographic Proximity in Venture Capital
- Geography and Venture Capital Investment in the United States, 1995–2009
- The Role of Government, Venture Capital, and Banks in Closing Liquidity Gaps in the SME Sector of an Emerging Market
Abstract and Keywords
The reputations of venture capital firms that operate in a highly fragmented private equity industry are examined in several recent studies, and this evidence is further developed in this article. The relations of a large number of suggested venture capitalist (VC) reputation measures to the probability of future successful initial public offers (IPOs) are analyzed, as well as four well-known measures of firm long-run performance: the rate of return on assets, market-to-book ratio, firm survival, and abnormal stock return. The primary finding is that a VC's past market share of VC-backed IPOs consistently shows a significant positive relation with the probability of future IPOs as well as with all four post-IPO issuer long-run performance measures investigated. This result holds after controlling for VC backing, VC banks, underwriter reputation, and issue and issuer characteristics. There is also evidence that more reputable VCs select stronger portfolio firms. However, the relation of VC reputation to firm performance continues to hold after adjusting for self-selection using well-known approaches. Thus after taking VC selectivity into account, strong evidence is found that more reputable VCs do add value to their portfolio firms after they go public.
C. N. V. Krishnan is Deborah and David Daberko fellow and associate professor of banking and finance at Case Western Reserve University. He graduated from the Indian Institute of Management, Ahmedabad, India, with an MBA and from the University of Wisconsin-Madison with a PhD in finance. His research is centered in empirical corporate finance. One area he is interested in is how financial intermediaries and financial services providers (bank regulators, investment bankers, venture capitalists, law firms, banks) create or destroy value. His research has been published in leading academic journals including the Journal of Finance, and has been presented at top academic conferences including the American Finance Association meetings.
Ronald W. Masulis is the Scientia professor of finance at the Australian School of Business at the University of New South Wales. His MBA and PhD degrees are from the University of Chicago. He is a research associate at the European Corporate Governance Institute, and is an associate editor at the Journal of Financial and Quantitative Analysis and an advisory editor at Financial Management. He is a past associate editor of the Journal of Finance, Journal of Financial Economics, and the Review of Financial Studies, among other academic journals, and a past member of the board of directors of the American Finance Association, Western Finance Association, and Financial Management Association. His research interests are in corporate finance, corporate governance, venture capital, mergers and acquisitions, and investment banking.
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