Venture-Backed Firms: How Does Venture Capital Involvement Affect Their Likelihood of Going Public or Being Acquired?

Venture-Backed Firms: How Does Venture Capital Involvement Affect Their Likelihood of Going Public or Being Acquired? Entrepreneurship: Theory and Practice, Forthcoming.

Posted: 9 Apr 2014 Last revised: 7 Feb 2018

See all articles by Roberto Ragozzino

Roberto Ragozzino

Nova School of Business and Economics

Dane Blevins

Independent

Date Written: April 8, 2014

Abstract

This paper investigates how venture capitalists' involvement in new ventures affects the likelihood of entrepreneurial exit, either via an acquisition or an initial public offering. We examine the prominence of VCs, the number of VCs invested in a company, as well as the timing, duration and magnitude of their investments in new ventures. We find that each of these dimensions directly explains entrepreneurial exit, although their effects tend to differ depending on whether the exit occurs via an acquisition or an IPO. These results withstand several robustness checks and offer a more precise account of how the relationship between new ventures and VC firms unfolds in the early years of the entrepreneurial cycle.

Keywords: entrepreneurship, VC, IPO, M&A, exit

Suggested Citation

Ragozzino, Roberto and Blevins, Dane, Venture-Backed Firms: How Does Venture Capital Involvement Affect Their Likelihood of Going Public or Being Acquired? (April 8, 2014). Venture-Backed Firms: How Does Venture Capital Involvement Affect Their Likelihood of Going Public or Being Acquired? Entrepreneurship: Theory and Practice, Forthcoming., Available at SSRN: https://ssrn.com/abstract=2422344

Roberto Ragozzino (Contact Author)

Nova School of Business and Economics ( email )

Campus de Carcavelos
Rua da Holanda, 1
Carcavelos, 2775-405
Portugal

Dane Blevins

Independent ( email )

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