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Venture Capital Reputation, Post-IPO Performance, and Corporate Governance

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  • Krishnan, C. N. V.
  • Ivanov, Vladimir I.
  • Masulis, Ronald W.
  • Singh, Ajai K.

Abstract

We examine the association of a venture capital (VC) firm’s reputation with the post-initial public offering (IPO) long-run performance of its portfolio firms. We find that VC reputation, measured by the past market share of VC-backed IPOs, has significant positive associations with long-run firm performance measures. While more reputable VCs initially select better-quality firms, more reputable VCs continue to be associated with superior long-run performance, even after controlling for VC selectivity. We find that more reputable VCs exhibit more active post-IPO involvement in the corporate governance of their portfolio firms, and this continued VC involvement positively influences post-IPO firm performance.

Suggested Citation

  • Krishnan, C. N. V. & Ivanov, Vladimir I. & Masulis, Ronald W. & Singh, Ajai K., 2011. "Venture Capital Reputation, Post-IPO Performance, and Corporate Governance," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 46(05), pages 1295-1333, November.
  • Handle: RePEc:cup:jfinqa:v:46:y:2011:i:05:p:1295-1333_00
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