2006 | OriginalPaper | Chapter
IPOs and venture capital
Published in: Public Policy for Venture Capital
Publisher: DUV
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The literature on venture capital has identified three main reasons for why IPOs could play an important role in the venture capital cycle. These are:
1.
IPOs on average generate significantly higher ROIs than other divestment venues,
2.
entrepreneurs value the possibility to regain control over their firm via an IPO, and
3.
IPOs signal that a given venture capital manager is successful and thus help raise follow-on funds.