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Where do we go? VC firm heterogeneity and the exit routes of newly listed high-tech firms

Diego Useche and Sophie Pommet ()
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Diego Useche: Université de Rennes 1, CREM, CNRS UMR 6211
Sophie Pommet: Université Nice Sophia Antipolis, GREDEG- UMR CNRS

Small Business Economics, 2021, vol. 57, issue 3, No 13, 1339-1359

Abstract: Abstract In this paper, we study how the support of heterogeneous venture capital firms (VCs), that is: independent venture capital firms (IVCs), bank-affiliated venture capital firms (BVCs), and corporate venture capital firms (CVCs), shapes the delisting route of companies through business failure and merger and acquisitions (M&As), while distinguishing between European M&As and extra-EU M&As after the initial public offering (IPO). We find that the influence of the VCs in the firms’ post-IPO delisting varies according to the mode of delisting and the type of venture capitalist. In particular, we find that the presence of leading IVC and BVC investments before IPO is related to a lower likelihood of exiting the stock market through business failure but does not significantly affect the likelihood of M&As. In contrast, the presence of CVC investors is related to a higher likelihood of delisting through extra-EU M&As.

Keywords: IPO survivability; Independent venture capital; Corporate venture capital; Bank-affiliated venture capital; High-tech firms; Firm failure; Cross-border M&As; G24; G30; L26 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/s11187-020-00351-x

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