Handbook of Research on IPOs
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Handbook of Research on IPOs

Edited by Mario Levis and Silvio Vismara

The Handbook of Research on IPOs provides a comprehensive review of the emerging trends and directions in the global initial public offerings (IPO) markets. The empirical evidence included in the book covers Europe, the US and the Far East, and presents a truly global perspective of IPO markets around the world and at the different stages of the entire IPO process.
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Chapter 15: Venture capital and IPO waves in Europe: an analysis of firm and performance characteristics

Wolfgang Bessler and Martin Seim


Venture capital (VC) is one of the most important financing sources for entrepreneurial start-up firms. A large body of theoretical and empirical literature documents venture capitalists’ ability to carefully screen new ventures, monitor management and provide strategic and operating advice to their portfolio firms (Gompers and Lerner, 1999; Metrick and Yasuda, 2011). In addition, venture capitalists mitigate information asymmetries between the entrepreneur and the VC firm as well as between the VC firm and its investors (Sahlman, 1990). Venture capital-financed firms also grow more rapidly and have higher survival probabilities compared to non-VC-financed firms, demonstrating the importance of venture capital for economic growth (Jain and Kini, 2000; Bessler et al., 2012d; Puri and Zarutskie, 2012). This is supported by the observation that an increase in employment and new job creation is strongly related to the growth rate of start-up firms but not to small firms per se (Haltiwanger et al., 2010).

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