Public Market Information and Venture Capital Investment

Journal of Financial and Quantitative Analysis. Forthcoming.

65 Pages Posted: 25 Feb 2019 Last revised: 30 Jul 2021

See all articles by Brian Gibbons

Brian Gibbons

Oregon State University College of Business

Date Written: February 13, 2019

Abstract

I study VCs’ use of public market information and how attention to this information relates to private market investment outcomes. I link web traffic to public filings hosted on EDGAR to individual VCs. VCs analyze public information about industry peers before most deals. An increase in industry filing views relates positively to the probability of an exit through acquisition, suggesting that public information helps identify paths to acquisition. The effect is stronger when the VC has less access to private information—especially for low reputation VCs. Policymakers should consider spillover effects on private markets when setting public disclosure requirements.

Keywords: Venture Capital, Due Diligence, EDGAR, Information Acquisition

JEL Classification: G11, G20, G24, G30

Suggested Citation

Gibbons, Brian, Public Market Information and Venture Capital Investment (February 13, 2019). Journal of Financial and Quantitative Analysis. Forthcoming., Available at SSRN: https://ssrn.com/abstract=3333996 or http://dx.doi.org/10.2139/ssrn.3333996

Brian Gibbons (Contact Author)

Oregon State University College of Business ( email )

Corvallis, OR 97331
United States

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