What One Can Learn From the Initial Public Offering of Google? A Twenty-Year Excursion to the Venture Capital Industry
AbstractOver the past two decades the venture capital industry became a major focus for the financial media. With potential for high rates of return, this industry attracts entrepreneurs looking for opportunities to invest. While some investments are successful and highly publicized, many are not. This paper gives insight about the role financing in different stages plays in determining the success of an investment. It compares data on the rates of return of 2,678 venture-backed public companies during multiple stages of financing. Additionally, this paper evaluates how the rates of return of these companies have changed between the 1980s and 1990s.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Penn Institute for Economic Research, Department of Economics, University of Pennsylvania in its series PIER Working Paper Archive with number 04-041.
Length: 24 pages
Date of creation: 25 Oct 2004
Date of revision:
Annualized returns; Venture Capital; Venture-Backed Public Companies; Stage of Financing; Initial Public Offering; Early-Stage Financing; Seed Financing; Research and Development Financing; Start-up Financing; First-Stage Financing; Expansion Financing; Second-Stage Financing; Third-Stage and Mezzanine Financing; Bridge Financing; Acquisition/Buyout Financing; Acquisition Financing; Management /Leveraged Buyout;
Find related papers by JEL classification:
- C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Capital; Investment; Capacity
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
- G3 - Financial Economics - - Corporate Finance and Governance
- M13 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - New Firms; Startups
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-01-02 (All new papers)
- NEP-ENT-2005-01-02 (Entrepreneurship)
- NEP-FIN-2005-01-02 (Finance)
- NEP-FMK-2005-01-02 (Financial Markets)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gordon Murray, 1999. "Early-stage venture capital funds, scale economies and public support," Venture Capital, Taylor & Francis Journals, vol. 1(4), pages 351-384, October.
- Paul Gompers & Josh Lerner, 1998.
"Conflict of Interest in the Issuance of Public Securities: Evidence from Venture Capital,"
NBER Working Papers
6847, National Bureau of Economic Research, Inc.
- Gompers, Paul & Lerner, Josh, 1999. "Conflict of Interest in the Issuance of Public Securities: Evidence from Venture Capital," Journal of Law and Economics, University of Chicago Press, vol. 42(1), pages 1-28, April.
- Hellmann, Thomas, 2002. "A theory of strategic venture investing," Journal of Financial Economics, Elsevier, vol. 64(2), pages 285-314, May.
- Martin, John D. & Petty, J. William, 1983. "An Analysis of the Performance of Publicly Traded Venture Capital Companies," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 18(03), pages 401-410, September.
- Mansfield, Edwin, 1986. "The R&D Tax Credit and Other Technology Policy Issues," American Economic Review, American Economic Association, vol. 76(2), pages 190-94, May.
- Lerner, Josh, 1995. " Venture Capitalists and the Oversight of Private Firms," Journal of Finance, American Finance Association, vol. 50(1), pages 301-18, March.
- Wang, Susheng & Zhou, Hailan, 2004. "Staged financing in venture capital: moral hazard and risks," Journal of Corporate Finance, Elsevier, vol. 10(1), pages 131-155, January.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dolly Guarini).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.