EconPapers    
Economics at your fingertips  
 

Scalability, venture capital availability, and unicorns: Evidence from the valuation and timing of IPOs

Deepak Somaya and Jingya You

Journal of Business Venturing, 2024, vol. 39, issue 1

Abstract: The growing phenomenon of highly valued startups (e.g., unicorns) poses fundamental questions for entrepreneurship research. We posit that venture scalability and VC funding availability may explain startups' IPO valuations (and timing). Highly scalable ventures may not only capture very large market opportunities, but their scaling strategies may also be constrained by the governance and regulatory burdens faced by public firms. Accordingly, we hypothesize and find that more scalable ventures undertake IPOs at higher valuations, which is positively moderated by VC funding availability. Highly scalable startups also delay their IPOs for longer but only when VC funding availability is high.

Keywords: Scalability; Scaling; Unicorns; Initial public offerings (IPOs); Startup valuation (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0883902623000599
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbvent:v:39:y:2024:i:1:s0883902623000599

DOI: 10.1016/j.jbusvent.2023.106345

Access Statistics for this article

Journal of Business Venturing is currently edited by S. Venkataraman

More articles in Journal of Business Venturing from Elsevier
Bibliographic data for series maintained by Catherine Liu (repec@elsevier.com).

 
Page updated 2024-12-28
Handle: RePEc:eee:jbvent:v:39:y:2024:i:1:s0883902623000599