Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/114711
Authors: 
Shachmurove, Yochanan
Year of Publication: 
2001
Citation: 
[Journal:] Journal of Entrepreneurial Finance [ISSN:] 1057-2287 [Volume:] 6 [Year:] 2001 [Issue:] 1 [Pages:] 44-58
Abstract: 
Although the national media has given increased attention to the venture capital process, misconceptions continue to proliferate. One often hears about the incredible capital gains of IPO share prices. This paper refutes the myth that investors demand very high rates of return to compensate for the risks involved in financing ventures. The paper investigates actual performance of 3,063 Initial Public Offerings of companies that were backed by venture capital from 1968 until 1998 stratified by current actively and inactively traded companies and by stages of financing. The main findings are that annualized returns are different for current actively and inactively traded firms and for many of the stages of financing but that they are much lower than the ones reported by the media and the venture capital literature.
Subjects: 
Venture Capital
Venture-Backed Companies
Initial Public Offering
IPO
MBO
Seed Financing
Mezzanine
JEL: 
C12
D81
D92
E22
G12
G24
G3
M13
M21
O16
O3
Document Type: 
Article

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