TY  - UNPD
A1  - Neus, Werner
A1  - Walz, Uwe
T1  - Exit timing of venture capitalists in the course of an initial public offering
T2  - Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2002,07
N2  - We analyze the desinvestment decision of venture capitalists in the course of an IPO of their portfolio firms. The capital market learns of the project quality only in the period following the IPO. Venture capitalists with high-quality firms face a trade-off between immediately selling their stake in the venture at a price below the true value and having to wait until the true value is revealed. We show that the dilemma may be resolved via a reputation-acquiring mechanism in a repeated game set-up. Thereby, we can explain, e.g., the advent of "hot-issue market behavior" involving early disinvestments and a high degree of price uncertainty. Furthermore, we provide a new rationale for underpricing. Young venture capitalists may use underpricing as a device for credibly committing themselves to acquiring reputation.
T3  - CFS working paper series - 2002, 07 
KW  - Exit Decisions
KW  - Venture Capital
KW  - IPO
KW  - Underpricing
KW  - Risikokapital
KW  - Desinvestition
KW  - Terminplanung
KW  - Börsenzulassung
KW  - Going Public
KW  - Wertpapieremission
KW  - Emissionskurs
KW  - Unendliches Spiel
Y1  - 2002
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/4495
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-9972
ER  -