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dc.contributor.authorManigart, Sophie
dc.contributor.authorMulier, Klaas
dc.contributor.authorVerplancke, Frederik
dc.date.accessioned2019-10-14T14:23:58Z
dc.date.available2019-10-14T14:23:58Z
dc.date.issued2019en_US
dc.identifier.urihttp://hdl.handle.net/20.500.12127/6411
dc.description.abstractIn this study we explain the returns obtained on venture capital (VC) investments in US companies that go public. Using a unique dataset of 1,921 investor-IPO returns, representing 564 IPOs, we show that later investments result in a higher return. This holds after controlling for observed and unobserved IPO company and VC investor characteristics. This is counterintuitive, as later investments should be less risky compared to early investments. We show that the positive relationship between investment timing and return can be explained by the VC’s reputation and the risk and uncertainty related to the IPO. The higher returns for late investments are obtained by high reputation VCs and on investments in more risky and uncertain IPOs. We exclude other possible explanations, such as IPO ratchets for late investors, exit pressure because of the relatively short VC fund lifespan cycle or by unexpected funding needs before IPO that expropriate early investors.
dc.language.isoenen_US
dc.subjectIPOsen_US
dc.subjectVenture Capital
dc.titleInvestment timing and the return on VC backed IPOsen_US
vlerick.conferencedate02/07/2019-03/07/2019en_US
vlerick.conferencelocationTrier, Germanyen_US
vlerick.conferencename4th Entrepreneurial Finance Conferenceen_US
vlerick.conferenceorganiserFGFen_US
vlerick.knowledgedomainAccounting & Financeen_US
vlerick.typeconfpresConference Presentationen_US
vlerick.vlerickdepartmentAFen_US
dc.identifier.vperid35884en_US


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