IPOs only offer a partial exit to Venture Capitalists (VCs). When a VC-backed company goes public, the VC typically refrains from selling all shares at the IPO. Due to the high levels of information asymmetry at the IPO, selling a large fraction of the holdings sends a negative signal concerning the company’s valuation. Iliev and… Read More »
Disagreement about firm value between potential buyers and sellers is particularly prevalent in private startups’ mergers and acquisitions (M&As). Startups are generally uncertain about their future performance and lack a robust financial track record. In M&A transactions, sellers often have more and better information (e.g., detailed information about the startup’s products and product markets) to… Read More »
Many of our most innovative companies that are household names started as venture capital (VC)-backed companies: Amazon, Google, Facebook, Airbnb, just to name a few. The lucky few startups that were able to raise money from VCs have changed our lives in significant ways—in how we obtain information, communicate with each other, and form relationships.… Read More »
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