Venture Capital Reputation, Post-IPO Performance, and Corporate Governance

C. N. V. Krishnan; Vladimir I. Ivanov; Ronald W. Masulis; Ajai K. Singh

doi:10.1017/s0022109011000251

Journal of Financial and Quantitative Analysis Vol. 46 No. 5 2011

Venture Capital Reputation, Post-IPO Performance, and Corporate Governance

C. N. V. Krishnan¹; Vladimir I. Ivanov; Ronald W. Masulis^2,3,4; Ajai K. Singh^5,6

¹ Case Western Reserve University · ² Australian Institute of Business · ³ Economic Development Board · ⁴ UNSW Sydney · ⁵ University of Central Florida · ⁶ Lehigh University

Abstract

We examine the association of a venture capital (VC) firm’s reputation with the post-initial public offering (IPO) long-run performance of its portfolio firms. We find that VC reputation, measured by the past market share of VC-backed IPOs, has significant positive associations with long-run firm performance measures. While more reputable VCs initially select better-quality firms, more reputable VCs continue to be associated with superior long-run performance, even after controlling for VC selectivity. We find that more reputable VCs exhibit more active post-IPO involvement in the corporate governance of their portfolio firms, and this continued VC involvement positively influences post-IPO firm performance.

DOI: 10.1017/s0022109011000251
Volume: 46
Issue: 5
Pages: 1295-1333
Language: en
Sources: bibtex:phds-export.bib openalex crossref

Venture Capital Reputation, Post-IPO Performance, and Corporate Governance

Abstract

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