Exit timing of venture capitalists in the course of an initial public offering
- 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.
| Verfasserangaben: | Werner Neus, Uwe WalzORCiDGND |
|---|---|
| URN: | urn:nbn:de:hebis:30-9972 |
| Titel des übergeordneten Werkes (Deutsch): | Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2002,07 |
| Schriftenreihe (Bandnummer): | CFS working paper series (2002, 07) |
| Dokumentart: | Arbeitspapier |
| Sprache: | Englisch |
| Jahr der Fertigstellung: | 2002 |
| Jahr der Erstveröffentlichung: | 2002 |
| Veröffentlichende Institution: | Universitätsbibliothek Johann Christian Senckenberg |
| Datum der Freischaltung: | 13.06.2005 |
| Freies Schlagwort / Tag: | Exit Decisions; IPO; Underpricing; Venture Capital |
| GND-Schlagwort: | Risikokapital; Desinvestition; Terminplanung; Börsenzulassung; Going Public; Wertpapieremission; Emissionskurs; Unendliches Spiel |
| Seitenzahl: | 49 |
| HeBIS-PPN: | 202717534 |
| Institute: | Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS) |
| DDC-Klassifikation: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Lizenz (Deutsch): |  Deutsches Urheberrecht |
