Private or Public Equity? The Evolving Entrepreneurial Finance Landscape

Michael Ewens and Joan Farre-Mensa

No 29532, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: G23 G24 G28 G34 G38 (search for similar items in EconPapers)
Date: 2021-12
New Economics Papers: this item is included in nep-bec, nep-cfn, nep-ent, nep-fmk, nep-pay and nep-sbm
Note: CF
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published as Michael Ewens & Joan Farre-Mensa, 2022. "Private or Public Equity? The Evolving Entrepreneurial Finance Landscape," Annual Review of Financial Economics, vol 14(1).

Downloads: (external link)
http://www.nber.org/papers/w29532.pdf (application/pdf)

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)
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:nbr:nberwo:29532

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w29532

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by (wpc@nber.org).