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Patents Innovation And Performance Of Venture Capital Backed Ipos
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Book Synopsis Patents, Innovation, and Performance of Venture Capital-backed IPOs by : Jerry Cao
Download or read book Patents, Innovation, and Performance of Venture Capital-backed IPOs written by Jerry Cao and published by . This book was released on 2015 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the predictive power of patents on the long-run performance of venture capital (VC)-backed initial public offerings (IPOs). We show that VC-backed IPOs that have at least one patent at the time of the IPO substantially outperform other VC-backed IPOs, with 3-year buy-and-hold market-adjusted returns of -7.1% vs. -23.3%. On average, VC-backed IPOs without patents perform similarly to non-VC-backed IPOs. We also report that VC-backed IPOs from 1981-1998 outperformed other IPOs, but the pattern has reversed for IPOs from 1999-2006. Although a smaller proportion of non-VC-backed IPOs possess patents, those with patents also outperform those without patents.
Book Synopsis IPOs of Venture Capital Backed Ventures by : Christian Mehrer
Download or read book IPOs of Venture Capital Backed Ventures written by Christian Mehrer and published by GRIN Verlag. This book was released on 2003-11-02 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: Studienarbeit aus dem Jahr 2002 im Fachbereich BWL - Investition und Finanzierung, Note: 1,3, European Business School - Internationale Universität Schloß Reichartshausen Oestrich-Winkel (-), Veranstaltung: Seminar des Wahlpflichtfaches Finanzierung und Banken, Sprache: Deutsch, Abstract: The topic of this paper is the difference of venture capital (VC) backed initial public offerings (IPOs) and non backed IPOs and the share price performance of the companies after the IPO. Compared to non-backed IPOs, VC backed IPOs consist on average of younger and less profitable firms. Nevertheless, VC backed companies have better underwriters, more institutional investors and less underpricing (i.e. a discount on the initial share price due to asymmetrical information). It is therefore considered that the venture capitalist (VCist) has an important impact on the share price performance of the young firm due to his certification role. By screening and mentoring the backed venture in earlier stages of the VC cycle, he can well assess the business’ opportunities. Thus, if he invests in the venture and keeps shares after the IPO, he can proof credibility to other investors (credibility hypothesis). However, younger VCists tend to bring companies too quickly to the stock markets, because they need an IPO for building up a reputation (grandstanding hypothesis). This may be adverse to the venture. Our findings also outline that there is no clear advantage of VC-backed firms on the long-run. Thus, we conclude that it is not only important to think about a VC backing, but also about the VCist that is backing. Choosing the wrong VCist may even have a negative impact on the company’s future.
Book Synopsis Venture Capital, Patenting, and Usefulness of Innovations by :
Download or read book Venture Capital, Patenting, and Usefulness of Innovations written by and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze incentives to develop entrepreneurial ideas for venture capitalists (VCs) and incumbent firms. If VCs are sufficiently better at judging an idea's value and if it is sufficiently more costly to patent low than high value ideas, VCs acquire valuable ideas, develop them beyond the level incumbents would have chosen, and use patents to signal their companies' high value to acquirers prior to exiting. This increases the VC-backed companies' patenting intensity and long-run performance, but also infl ates their acquisition prices, and lowers their acquirers' overall profits. Patent law usefulness clauses would reduce such excessive, signaling-driven investment and patenting intensity.
Author :Georg Rindermann Publisher :Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften ISBN 13 : Total Pages :226 pages Book Rating :4.F/5 ( download)
Book Synopsis Venture Capitalist Participation and the Performance of IPO Firms by : Georg Rindermann
Download or read book Venture Capitalist Participation and the Performance of IPO Firms written by Georg Rindermann and published by Peter Lang Gmbh, Internationaler Verlag Der Wissenschaften. This book was released on 2004 with total page 226 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis investigates whether venture capitalists in Europe have a positive impact on the operating and long-run market performance of firms they bring public. To examine this issue a hand-collected international data set of venture- and non venture-backed IPOs at the French Nouveau Marché, German Neuer Markt, and British techMARK dating from 1996 to 1999 is used. The findings suggest that there are substantial variations in the experience and sophistication of venture capitalists. Moreover, venture-backed IPOs do not generally outperform non venture-backed issues, irrespective of the applied performance measure. Instead, merely the more experienced international venture capitalists appear to have positive effects on both the operating and market performance of portfolio firms. The overall results are interpreted as evidence for the heterogeneity of venture capitalists operating in the European market.
Book Synopsis The Oxford Handbook of Venture Capital by : Douglas Cumming
Download or read book The Oxford Handbook of Venture Capital written by Douglas Cumming and published by Oxford University Press. This book was released on 2012-04-20 with total page 1126 pages. Available in PDF, EPUB and Kindle. Book excerpt: Venture capital (VC) refers to investments provided to early-stage, innovative, and high growth start-up companies. A common characteristic of all venture capital investments is that investee companies do not have cash flows to pay interest on debt or dividends on equity. Rather, investments are made with a view towards capital gain on exit. The most sought after exit routes are an initial public offering (IPO), where a company lists on a stock exchange for the first time, and an acquisition exit (trade sale), where the company is sold in entirety to another company. However, VCs often exit their investments by secondary sales, wherein the entrepreneur retains his or her share but the VC sells to another company or investor buybacks, where the entrepreneur repurchases the VC`s interest and write-offs (liquidations). The Oxford Handbook of Venture Capital provides a comprehensive picture of all the issues dealing with the structure, governance, and performance of venture capital from a global perspective. The handbook comprises contributions from 55 authors currently based in 12 different countries.
Book Synopsis The performance of venture capital funds and VC-backed IPOs by : Stanley Lou Weng Hong
Download or read book The performance of venture capital funds and VC-backed IPOs written by Stanley Lou Weng Hong and published by . This book was released on 2012 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Performance and Relationship Between Venture Capitalists and Venture-capital-backed IPOs by : Tieh Shang Jin
Download or read book The Performance and Relationship Between Venture Capitalists and Venture-capital-backed IPOs written by Tieh Shang Jin and published by . This book was released on 2008 with total page 388 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis How Resilient is Venture-Backed Innovation? Evidence from Four Decades of U.S. Patenting by : Sabrina T. Howell
Download or read book How Resilient is Venture-Backed Innovation? Evidence from Four Decades of U.S. Patenting written by Sabrina T. Howell and published by . This book was released on 2020 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: By comparing patenting among VC-backed firms to the universe of U.S. patents over the period 1976-2019, we document that while patents led by VC-backed firms are of significantly higher quality and economic importance than the average patent, VC-backed innovation is substantially more procyclical than innovation in the broader economy. This is driven early-stage startups, whose innovation in recessions is relatively less cited, less original, less general, and less related to fundamental science. Our findings are most consistent with frictions in capital supply playing an important role, leading VCs to change their investment focus during downturns towards less innovative startups.
Book Synopsis Persistence of Innovation Around Initial Public Offerings by : Serdar Aldatmaz
Download or read book Persistence of Innovation Around Initial Public Offerings written by Serdar Aldatmaz and published by . This book was released on 2018 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the innovation activity of firms going public and find that post-IPO innovation activity is highly associated with pre-IPO innovation activity at both venture-capital- and non-venture-capital-backed firms. This persistence in innovation suggests that firms' pre-IPO innovation experience might influence the effect of venture-capital-backing on post-IPO innovation. Indeed, we find that venture-capital-backing helps companies with low pre-IPO innovation activity to produce more innovation output post-IPO, while it is negatively associated with post-IPO innovation at companies with some pre-IPO innovation experience, which we try to explain with an IPO timing argument. We attempt to address potential endogeneity issues in a matching framework.
Book Synopsis After Market Performance of Venture-backed and Non Venture-backed IPOs by : Suzanne Adulrazzak Charbaji
Download or read book After Market Performance of Venture-backed and Non Venture-backed IPOs written by Suzanne Adulrazzak Charbaji and published by . This book was released on 2011 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the effect of Venture Capital (VC) reputation on the three year aftermarket performance of its invested IPO firms. A sample of 3,220 U.S. Initial Public Offerings (IPOs) firms for the 1990-2005 period is used to test the hypotheses. To measure the VC reputation effect, I use two proxies which are: number of companies taken public by the VC and the age of the VC. The findings of the paper show that VC-backed firms perform better than non VC-backed firms in the first, second and third year of issuance. Also, reputable VC-backed firms perform better than average VC-backed ones in the second and third year of issuance. The findings confirm the VC effect and the VC reputation effect on the long run after market performance of IPO firms.
Book Synopsis Venture Capital and the Finance of Innovation by : Andrew Metrick
Download or read book Venture Capital and the Finance of Innovation written by Andrew Metrick and published by John Wiley and Sons. This book was released on 2011-06-15 with total page 1153 pages. Available in PDF, EPUB and Kindle. Book excerpt: This useful guide walks venture capitalists through the principles of finance and the financial models that underlie venture capital decisions. It presents a new unified treatment of investment decision making and mark-to-market valuation. The discussions of risk-return and cost-of-capital calculations have been updated with the latest information. The most current industry data is included to demonstrate large changes in venture capital investments since 1999. The coverage of the real-options methodology has also been streamlined and includes new connections to venture capital valuation. In addition, venture capitalists will find revised information on the reality-check valuation model to allow for greater flexibility in growth assumptions.
Book Synopsis Post-Ipo Performance and the Exit of Venture Capitalists by : Tilo Kraus
Download or read book Post-Ipo Performance and the Exit of Venture Capitalists written by Tilo Kraus and published by . This book was released on 2003 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: We test several implications of venture capital investment for the post-IPO performance of firms using data of 312 IPOs on Germany's Neuer Markt. Through tighter corporate control, third party certification and a reduced heterogeneity of opinions companies financed by Venture Capital firms might outperform their counterparties in the aftermarket of an IPO. However, this positive effect of VC backing on aftermarket performance could be reversed when Venture Capitalists seek exit from their investment. The discontinuation of a blockholder's exercised corporate control, signalling of insider knowledge as well as possible downward sloping demand curves provide an analytical framework that explains why the return series of VC backed IPOs might show a significant breakpoint at the time when Venture Capitalists exit from their investments. Our empirical evidence suggests that the expiration of lock-up periods as the earliest possible point of time for an exit represents such as breakpoint as Venture Capital backed IPOs outperform their counterparts before, but underperform around and after the expiration.
Book Synopsis Technology Timing of IPOs and Venture Capital Incubation by : Scott Hsu
Download or read book Technology Timing of IPOs and Venture Capital Incubation written by Scott Hsu and published by . This book was released on 2014 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates whether industry technological changes affect the timing of venture capital-backed IPOs. Venture capitalists (VCs) shorten incubation periods and take portfolio companies public when the industry exhibits high levels of technological change. This technology timing of IPOs reflects the VCs' efforts to raise future capital. In particular, during periods of greater technological change, VCs that conduct IPOs after shorter incubation periods obtain more subsequent funding. However, portfolio companies with shorter incubation periods earn fewer patents, are less likely to survive, and experience worse stock returns after their IPOs. These findings provide new insights into VCs' strategic exit decisions due to changes in the technological environment, as well as how their decisions affect the post-exit performance of their portfolio companies.
Download or read book VC written by Tom Nicholas and published by Harvard University Press. This book was released on 2019-06-03 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: From nineteenth-century whaling to a multitude of firms pursuing entrepreneurial finance today, venture finance reflects a deep-seated tradition in the deployment of risk capital in the United States. Tom Nicholas’s history of the venture capital industry offers a roller coaster ride through America’s ongoing pursuit of financial gain.
Book Synopsis Underpricing and Stock Market Performance of Venture Capital Backed IPO by : 林璟如
Download or read book Underpricing and Stock Market Performance of Venture Capital Backed IPO written by 林璟如 and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Does Venture Capital Spur Innovation? by : Samuel Kortum
Download or read book Does Venture Capital Spur Innovation? written by Samuel Kortum and published by . This book was released on 1998 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: While policymakers often assume venture capital has a profound impact on innovation, that premise has not been evaluated systematically. We address this omission by examining the influence of venture capital on patented inventions in the United States across twenty industries over three decades. We address concerns about causality in several ways, including exploiting a 1979 policy shift that spurred venture capital fundraising. We find that the amount of venture capital activity in an industry significantly increases its rate of patenting. While the ratio of venture capital to R&D has averaged less than 3% in recent years, our estimates suggest that venture capital accounts for about 15% of industrial innovations. We address concerns that these results are an artifact of our use of patent counts by demonstrating similar patterns when other measures of innovation are used in a sample of 530 venture-backed and non-venture-backed firms.
Book Synopsis Reducing Asymmetric Information in Venture Capital Backed IPOs by : Diego Escobari
Download or read book Reducing Asymmetric Information in Venture Capital Backed IPOs written by Diego Escobari and published by . This book was released on 2016 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - The purpose of this paper is to model asymmetric information and study the profitability of venture capital (VC) backed initial public offerings (IPOs). Our mixtures approach endogenously separates IPOs into differentiated groups based on their returns' determinants. We also analyze the factors that affect the probability that IPOs belong to a specific group.Design/methodology/approach - We propose a new method to model asymmetric information between investors and firms in VC backed IPOs. Our approach allows us to identify differentiated companies under incomplete information. We use a sample of 2,404 U.S. firms from 1980 through 2012 to estimate our mixture model via maximum likelihood.Findings - We find strong evidence that companies can be separated into two groups based on how IPO returns are determined. For companies in the first group the results are similar to previous studies. For companies in the second group we find that profitability is mainly affected by the reputation of the seed VC and capital expenditures. Tangible assets and age help explain group affiliation. We also motivate our findings for a continuum of heterogeneous IPO groups.Practical implications - The proposed mixture approach helps decrease asymmetric information for investors, regulators, and companies.Originality/value - Our mixture methods help decrease asymmetric information between investors and firms improving the probability of making profitable investments. Separating between groups of IPOs is crucial because different determinants of an IPO operating performance can potentially have opposite effects for different groups.
