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The value of ongoing venture capital investment to newly listed firms

The value of ongoing venture capital investment to newly listed firms We examine whether the market values continuing venture capital (VC) investor involvement in firms post‐IPO. Compared to the US, Australian VC investors exit their investments post‐IPO by on‐market sales rather than distribution of holdings to their investors. Lockup periods tend to be longer and ownership thresholds for reporting trades lower. We find that the market responds positively to buy transactions, negatively to sell transactions of VC investors and negatively to the resignation of VC directors. These results are consistent with VC investors in the firm having a positive influence and creating value from which the VCs and other shareholders benefit. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

The value of ongoing venture capital investment to newly listed firms

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References (67)

Publisher
Wiley
Copyright
Accounting and Finance © 2020 AFAANZ
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/acfi.12457
Publisher site
See Article on Publisher Site

Abstract

We examine whether the market values continuing venture capital (VC) investor involvement in firms post‐IPO. Compared to the US, Australian VC investors exit their investments post‐IPO by on‐market sales rather than distribution of holdings to their investors. Lockup periods tend to be longer and ownership thresholds for reporting trades lower. We find that the market responds positively to buy transactions, negatively to sell transactions of VC investors and negatively to the resignation of VC directors. These results are consistent with VC investors in the firm having a positive influence and creating value from which the VCs and other shareholders benefit.

Journal

Accounting & FinanceWiley

Published: Jun 1, 2020

Keywords: ; ; ;

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