Abstract

http://ssrn.com/abstract=568165
 
 

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The Reality of IPO Performance: An Empirical Study of Venture-Backed Public Companies


Yochanan Shachmurove


The City College of The City University of New York - Department of Economics; The University of Pennsylvania - Department of Economics

July 2004

PIER Working Paper No. 04-030

Abstract:     
The incredible profits of Initial Public Offerings have often been emphasized in the media as a popular investment for the public. This paper takes a few steps towards refuting such an assertion by investigating the performance of 2,895 venture capital backed IPOs between 1968 and September 1998. The paper finds that it is incorrect to assume that investors demand very high annualized and cumulative rates of return to compensate for the risks they are taking by financing ventures in different sectors of the economy. The mean rates of return are found to be, in practice, very moderate, and often, negative.

Number of Pages in PDF File: 24

Keywords: Initial public offering, venture capital, annualized and cumulative rates of return, Information Technology, Medical, Health and Life Science, Non-High Technology, Biotechnology, Communications, Computer Industry, Semiconductor and Other Electronics Industries

JEL Classification: C12, D81, D92, E22, G12, G24, G3, M13, M21, O16, O

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Date posted: July 26, 2004  

Suggested Citation

Shachmurove, Yochanan, The Reality of IPO Performance: An Empirical Study of Venture-Backed Public Companies (July 2004). PIER Working Paper No. 04-030. Available at SSRN: http://ssrn.com/abstract=568165 or http://dx.doi.org/10.2139/ssrn.568165

Contact Information

Yochanan Shachmurove (Contact Author)
The City College of The City University of New York - Department of Economics ( email )
160 Convent Avenue
New York, NY 10031
United States
212-650-6202 (Phone)
The University of Pennsylvania - Department of Economics ( email )
3718 Locust Walk
Philadelphia, PA 19104
United States
215-898-1090 (Phone)
215-573-2057 (Fax)
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