Explaining the Variance in Underpricing among Venture Capital-Backed IPOs: A Comparison Between Private and Corporate VC Firms
Xiaodan ‘Abby’ Wang, William P. Wan
Strategic Entrepreneurship Journal · 2013 · Volume 7 · Issue 4
Abstract
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.
Keywords
IPO underpricing, venture capital firms, entrepreneurial ventures, private VC, corporate VC
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