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Venture Capital and Firm Performance Over the Long-Run: Evidence from High-Tech IPOs in the United States

James R. Brown
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James R. Brown: Montana State University

Journal of Entrepreneurial Finance, 2005, vol. 10, issue 3, 1-33

Abstract: Despite widespread interest in the key role that venture capital plays in financing young, high-tech firms, little is known about the relative performance of venture-backed firms over the long-run. Using data from the U.S. high-tech sector, this paper examines the performance and financing of venture- and non-venture-backed firms during the decade following their IPO. Venture-backed firms survive longer, grow faster, are more R&D intensive, have generally superior operating performance, raise more external equity, and have a greater cumulative impact on the U.S. high-tech sector. These findings suggest that the true legacy of venture capital finance extends well beyond the IPO.

Keywords: Venture Capital; Initial Public Offering; IPO; High-Tech (search for similar items in EconPapers)
JEL-codes: G24 M13 (search for similar items in EconPapers)
Date: 2005
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Handle: RePEc:pep:journl:v:10:y:2005:i:3:p:1-33