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

24 Pages Posted: 25 Oct 2004

See all articles by Yochanan Shachmurove

Yochanan Shachmurove

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

Emanuel Shachmurove

Independent

Date Written: October 2004

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.

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

Suggested Citation

Shachmurove, Yochanan and Shachmurove, Emanuel, What One Can Learn from the Initial Public Offering of Google? A Twenty-Year Excursion to the Venture Capital Industry (October 2004). PIER Working Paper No. 04-041. Available at SSRN: https://ssrn.com/abstract=609981 or http://dx.doi.org/10.2139/ssrn.609981

Yochanan Shachmurove (Contact Author)

City University of New York, CUNY City College 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 )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-1090 (Phone)
215-573-2057 (Fax)

Emanuel Shachmurove

Independent ( email )

56 Trent Road
Wynnewood, PA 19096
United States

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