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Stock Exchange Markets for New Ventures

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  • Cécile Carpentier

    ()

  • Jean-François L'Her
  • Jean-Marc Suret

    ()

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    Abstract

    In Canada, a venture stock market lists micro-capitalization firms that are at a pre-revenue stage, and competes with both formal and informal venture capital (VC). This market provides a higher rate of return and is able to provide seven times more new listings to the main exchange than the VC market. We do not evidence post-graduation underperformance, and indeed, new listings on a main exchange can succeed even if they originate from a public venture market. Our results do not support the theoretical arguments that confer specific advantages on the VCs with regard to screening, monitoring and exiting new ventures. Au Canada, un marché boursier de capital de risque inscrit des entreprises à très faible capitalisation, avant même qu’elles ne rapportent des revenus. Ce marché est en concurrence directe avec le capital de risque institutionnel et informel. Le taux de rendement de ce marché boursier est supérieur à celui du capital de risque, et ce marché amène sept fois plus d’entreprises au marché principal, par « graduation », que ne le fait le capital de risque à la suite d’émissions initiales. Nous n’observons aucune performance anormale négative à la suite des graduations. Nos résultats indiquent que le capital de risque canadien ne semble pas disposer des avantages que la théorie attribue généralement à ce type d’investisseurs en matière de sélection des projets, de supervision ou encore de capacité de disposition des placements.

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    Bibliographic Info

    Paper provided by CIRANO in its series CIRANO Working Papers with number 2008s-12.

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    Date of creation: 01 Apr 2008
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    Handle: RePEc:cir:cirwor:2008s-12

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    Keywords: public venture capital; start-up; graduation; success rate; stock exchange; capital de risque; démarrage; graduation; marché boursier;

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    Cited by:
    1. Cécile Carpentier & Douglas Cumming & Jean-Marc Suret, 2009. "The Value of Capital Market Regulation: IPOs versus Reverse Mergers," CIRANO Working Papers, CIRANO 2009s-06, CIRANO.
    2. Cécile Carpentier & Jean-Marc Suret, 2009. "Investir dans des titres de petite capitalisation : le cas de la Bourse de croissance TSX," CIRANO Working Papers, CIRANO 2009s-07, CIRANO.

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