What One Can Learn from the Initial Public Offering of Google? A Twenty-Year Excursion to the Venture Capital Industry

Abstract:     
Over the past two decades the venture capital industry became a major focus for the financial media. With potential for high rates of return, this industry attracts entrepreneurs looking for opportunities to invest. While some investments are successful and highly publicized, many are not. This paper gives insight about the role financing in different stages plays in determining the success of an investment. It compares data on the rates of return of 2,678 venture-backed public companies during multiple stages of financing. Additionally, this paper evaluates how the rates of return of these companies have changed between the 1980s and 1990s.

Number of Pages in PDF File: 24

Keywords: Annualized returns, Venture Capital, Venture-Backed Public Companies, Stage of Financing, Initial Public Offering, Early-Stage Financing, Seed Financing, Research and Development Financing, Start-up Financing, First-Stage Financing, Expansion Financing, Second-Stage Financing

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

working papers series