Private or Public Equity? The Evolving Entrepreneurial Finance Landscape

Michael Ewens and Joan Farre-Mensa

No 9am4w, SocArXiv from Center for Open Science

Abstract: The U.S. entrepreneurial finance market has changed dramatically over the last two decades. Entrepreneurs raising their first round of venture capital retain 30% more equity in their firm and are more likely to control their board of directors. Late-stage startups are raising larger amounts of capital in the private markets from a growing pool of traditional and new investors. These private market changes have coincided with a sharp decline in the number of firms going public—and when firms do go public, they are older and have raised more private capital. To understand these facts, we provide a systematic description of the differences between private and public firms. Next, we review several regulatory, technological, and competitive changes affecting both startups and investors that help explain how the trade-offs between going public and staying private have changed. We conclude by listing several open research questions.

Date: 2021-11-07
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-ent, nep-pay and nep-sbm
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Private or Public Equity? The Evolving Entrepreneurial Finance Landscape (2022)
Working Paper: Private or Public Equity? The Evolving Entrepreneurial Finance Landscape (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:9am4w

DOI: 10.31219/osf.io/9am4w

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