Review of Finance Vol. 16 No. 2 2012
Venture Capital and Corporate Governance in the Newly Public Firm
Abstract
I examine the effects of venture capital backing on the corporate governance of the entrepreneurial firm at the time of transition from private to public ownership. Using a selection model framework that instruments for venture backing with variations in the supply of venture capital, I conduct three sets of tests comparing corporate governance in venture- and non–venture-backed initial public offering (IPO) firms. Venture-backed firms have lower levels of earnings management, more positive reactions to the adoption of shareholder rights agreements, and more independent board structures than similar non–venture-backed firms, consistent with better governance. These effects are not common to all pre-IPO large shareholders.
- DOI
- 10.1093/rof/rfr035
- Volume
- 16
- Issue
- 2
- Pages
- 429-480
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref