IDEAS home Printed from https://ideas.repec.org/a/wsi/jdexxx/v13y2008i04ns1084946708001058.html
   My bibliography  Save this article

Employee Equity Incentives And Venture Capitalist Involvement: Examining The Effects On Ipo Performance

Author

Listed:
  • JAMES W. WESTERMAN

    (Appalachian State University, Walker College of Business Administration, ASU Box 32089, Boone, NC 28608-2089, USA)

  • SCOTT W. GEIGER

    (University of South Florida St. Petersburg, College of Business, 140 7th Ave South, St. Petersburg, FL 33701, USA)

  • LINDA A. CYR

    (Tapestry Networks, 45 Church St. #3, Boston, MA 02116, USA)

Abstract

We examine the effects of venture capitalist involvement and equity incentives for all employees on the performance of initial public offering firms. Data was collected from 402 IPO firms, representing 242 non-VC backed and 160 VC backed firms. Results indicate venture capitalists positively influence the likelihood the portfolio firm will offer equity incentives to all employees. Consistent with the agency theory argument that monitoring and incentives can behave as complements to one another, the results suggest venture capitalist backing and incentive stock options for all employees operate in concert to have a positive effect on stock price performance three years after the initial public offering.

Suggested Citation

  • James W. Westerman & Scott W. Geiger & Linda A. Cyr, 2008. "Employee Equity Incentives And Venture Capitalist Involvement: Examining The Effects On Ipo Performance," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 13(04), pages 409-423.
    • Handle: RePEc:wsi:jdexxx:v:13:y:2008:i:04:n:s1084946708001058
    DOI: 10.1142/S1084946708001058
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S1084946708001058
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S1084946708001058?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rosenbusch, Nina & Brinckmann, Jan & Müller, Verena, 2013. "Does acquiring venture capital pay off for the funded firms? A meta-analysis on the relationship between venture capital investment and funded firm financial performance," Journal of Business Venturing, Elsevier, vol. 28(3), pages 335-353.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:jdexxx:v:13:y:2008:i:04:n:s1084946708001058. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/jde/jde.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.