Pre-IPO Financing in Newly Public Firms
44 Pages Posted: 16 Aug 2012 Last revised: 7 Dec 2015
Date Written: June 29, 2013
Abstract
A large literature has demonstrated that venture capitalists influence the firms they invest in and that the effects are long-lasting. Far less is known about the importance and influence of pre-IPO bank financing. Over one-quarter of all IPO firms have raised money through syndicated loans prior to the IPO. We posit and find support for the premise that syndicated loans provide a variety of benefits to firms, and that these benefits are also long-lasting, but differ markedly from those provided by venture capital financing. In particular, firms with pre-IPO bank have significantly enhanced access to external financing after the IPO, are able to operate with smaller internal capital markets, and are less likely to delist.
Keywords: IPO, debt, cash
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Determinants and Implications of Corporate Cash Holdings
By Tim C. Opler, Lee Pinkowitz, ...
-
The Cash Flow Sensitivity of Cash
By Heitor Almeida, Murillo Campello, ...
-
Why Do U.S. Firms Hold so Much More Cash than They Used to?
By Thomas W. Bates, Kathleen M. Kahle, ...
-
Why Do U.S. Firms Hold so Much More Cash than They Used to?
By Thomas W. Bates, Kathleen M. Kahle, ...
-
Bank Lines of Credit in Corporate Finance: An Empirical Analysis
By Amir Sufi
-
Corporate Governance and Firm Cash Holdings
By Jarrad Harford, Sattar Mansi, ...
-
Corporate Financial Policy and the Value of Cash
By Michael W. Faulkender and Rong Wang
-
Is Cash Negative Debt? A Hedging Perspective on Corporate Financial Policies
By Heitor Almeida, Viral V. Acharya, ...