Review of Financial Studies Vol. 24 No. 9 2011
Can VCs Time the Market? An Analysis of Exit Choice for Venture-backed Firms
Abstract
[We use a sample of 8,163 venture-backed companies over three decades to test the competing hypotheses that levels and relative shares of IPO (initial public offering) and M&A (mergers and acquisitions) exits are affected by market timing, versus pseudo-market timing that reflects market conditions. We find evidence of pseudo-market timing. Venture-backed issuers react to market or sector runups but do not predict downturns. We find no evidence that firm-specific market timing contributes to IPO or M&A waves. We also find that acquirers turn to acquisition when other opportunities are unattractive, and that the market may be slow to recognize that such opportunities are declining.]
- Volume
- 24
- Issue
- 9
- Pages
- 3105-3138
- Sources
- bibtex:phds-export.bib