INITIAL PUBLIC OFFERINGS AND PRE-IPO SHAREHOLDERS: ANGELS VERSUS VENTURE CAPITALISTS

William C. Johnson () and Jeffrey E. Sohl ()
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William C. Johnson: Sawyer Business School, Suffolk University, 8 Ashburton Place, Boston, MA 02108, United States
Jeffrey E. Sohl: Whittemore School of Business and Economics, University of New Hampshire, 15 Academic Way, Durham, NH 03824, United States

Journal of Developmental Entrepreneurship (JDE), 2012, vol. 17, issue 04, 1-23

Abstract: At the time of an initial public offering, shares in a firm are typically held by venture capitalists, insiders, corporate investors and angel investors. We examine the role of angel investors in the IPO process. We find that angel investors provide equity capital in industries venture capitalists are less likely to serve and that shareholders in angel backed IPO firms are more likely to sell their shares at the time of the offering. Where venture capital backed IPO firms have higher underpricing, angel backed IPO firms do not, implying that angels may be the preferred investors for early-stage firms.

Keywords: Business angels; venture capital investors; initial public offerings; underpricing (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S1084946712500227

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