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The value of ongoing venture capital investment to newly listed firms

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  • Wei‐Huei Hsu
  • Sian Owen
  • Jo‐Ann Suchard

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.

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  • Wei‐Huei Hsu & Sian Owen & Jo‐Ann Suchard, 2020. "The value of ongoing venture capital investment to newly listed firms," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(2), pages 1327-1349, June.
    • Handle: RePEc:bla:acctfi:v:60:y:2020:i:2:p:1327-1349
    DOI: 10.1111/acfi.12457
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    3. Li Cui & Pamela Kent & Sujin Kim & Shan Li, 2021. "Accounting conservatism and firm performance during the COVID‐19 pandemic," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5543-5579, December.
    4. Pamela Kent & Robyn McCormack & Tamara Zunker, 2021. "Employee disclosures in the grocery industry before the COVID‐19 pandemic," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(3), pages 4833-4858, September.

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