Fuzzy regression model for forecasting impact of venture capital network and underwriter network on IPO premium

Secondary Market ◽

Fuzzy Regression ◽

Central Position ◽

Public Offerings ◽

Fuzzy Regression Model ◽

Market Premium ◽

In recent years, social network analysis is one of the top 20 fields of artificial intelligence. Based on the network signal theory, this study examines the influence of the dual network embeddedness on the price premiums of Chinese initial public offerings (IPOs). In this paper we proposed fuzzy regression model for forecasting the impact of venture capital network and underwriter network on IPO premium based on some hypothesis. We find that: (1) Enterprises embedded in the central position of venture capital network will increase the IPO secondary market premium; (2) Secondly, employing underwriter in the central position of underwriting network will increase the IPO secondary market premium; (3) As venture capital are getting closer to the central position of venture capital network, the influence of underwriter network centrality in underwriting network on the increase of IPO secondary market reaction will gradually weaken. The research shows that occupying central position both in venture capital syndication network and underwriting network have the functions of sending signals, then increase the IPO secondary market premium, but the functions of different network signals will replace each other.

Stage financing and syndication in the IPO underpricing of venture-backed firms: Venture capital and IPO underpricing

The International Journal of Entrepreneurship and Innovation ◽

10.1177/1465750318795083 ◽

2019 ◽

Vol 20 (4) ◽

pp. 289-300 ◽

Cited By ~ 1

Author(s):

Awounou-N’dri Honorine ◽

Dubocage Emmanuelle

Keyword(s):

Venture Capital ◽

Information Asymmetry ◽

Capital Investment ◽

Ipo Underpricing ◽

Data Set ◽

Public Offerings ◽

Venture Capital Investment ◽

Ipo Performance ◽

The article investigates the impact of stage financing and syndication practices on the underpricing level of venture-backed firms (VBFs) undertaking their initial public offerings (IPOs). This empirical study uses a unique hand-collected data set concerning more than 260 VBFs that went public on Euronext Paris and Alternext between 1997 and 2013. Our findings suggest a lower level of underpricing for firms backed by syndicated venture capital investment. Additionally, we find that the syndicate size is negatively associated with the level of underpricing. However, there is no evidence that stage financing has a significant impact. Syndication thus appears to be the only relevant mechanism to improve IPO performance (measured by the underpricing level), as it reduces agency costs and information asymmetry between the different stakeholders in an IPO process.

The impact of venture capital backing on the corporate governance of Australian initial public offerings

Journal of Banking & Finance ◽

10.1016/j.jbankfin.2008.10.018 ◽

2009 ◽

Vol 33 (4) ◽

pp. 765-774 ◽

Cited By ~ 46

Author(s):

Jo-Ann Suchard

Keyword(s):

Corporate Governance ◽

Venture Capital ◽

Public Offerings ◽

“Success by Association”: The Impact of Venture Capital Firm Reputation Trend on Initial Public Offering Valuations

Journal of Management ◽

10.1177/0149206319847265 ◽

2019 ◽

Vol 47 (2) ◽

pp. 368-398 ◽

Cited By ~ 1

Author(s):

Salim Chahine ◽

Igor Filatotchev ◽

Garry D. Bruton ◽

Mike Wright

Keyword(s):

Venture Capital ◽

Initial Public Offering ◽

Central Element ◽

The United States ◽

Firm Reputation ◽

Public Offerings ◽

Experience Intensity ◽

Public Offering ◽

Organizational theory recognizes reputation as a central element to understanding the firm. Examining investor valuations of 1,676 initial public offerings (IPOs) in the United States from 1990 to 2011, we find that reputation transfer through an association of an IPO firm with a venture capital (VC) firm represents a resource whose value can increase/decrease over time depending on investors’ valuations of prior IPOs funded by a VC firm. We conclude that the impact of reputation transfer through association is not unidirectional but, instead, is to be viewed in the context of prior reputational development of organizations the focal firm is associated with. Furthermore, we find that three “transfer enhancers” can improve the impact of VC firm reputation transfer on IPO valuations, including the VC firm’s past experience intensity, the diversity of IPO experiences, and the number of prior syndicated IPOs involving the VC firm as a lead investor.