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IPO/M&A Exits by Venture Capital in India: Do Agency Risks Matter?

Kshitija Joshi|Deepak Chandrashekar
아시아기술혁신학회 (Asian Society for Innovation and Policy)|2018.12|Asian Journal of Innovation and Policy|제7권 제3호|pp. 534-563|DOI DOI: http//dx.doi.org/10.7545/ajip.2018.7.3.534

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키워드

Indiasocial capitalVenture capitalexitsagency riskssyndicationdomain specialization
주제분류기술정책

초록

Venture Capital Firms (VCs) encounter severe information asymmetry risks at almost every stage in their investment lifecycle. This paper explores the agency risks arising from information asymmetry during the stage of exits by VCs from the funded companies in their portfolio and how that impacts the incidence of specific types of type of exits (IPOs/M&As). In this empirical study, by using the data on IPO and M&A exits from venture capital-funded companies, we show how the ability of prospective buyers to better resolve agency risks is directly correlated with the incidence of the above exit types. Using the technique of logistic regression, we demonstrate that factors such as syndication, specialization focus of the VC firm (in terms of stage and sector) and the level of its social capital (proxied by its age and experience) drive the success rate of exits. This is one of first studies in context of exits from VC funded companies in the Indian context.

Abstract

Venture Capital Firms (VCs) encounter severe information asymmetry risks at almost every stage in their investment lifecycle. This paper explores the agency risks arising from information asymmetry during the stage of exits by VCs from the funded companies in their portfolio and how that impacts the incidence of specific types of type of exits (IPOs/M&As). In this empirical study, by using the data on IPO and M&A exits from venture capital-funded companies, we show how the ability of prospective buyers to better resolve agency risks is directly correlated with the incidence of the above exit types. Using the technique of logistic regression, we demonstrate that factors such as syndication, specialization focus of the VC firm (in terms of stage and sector) and the level of its social capital (proxied by its age and experience) drive the success rate of exits. This is one of first studies in context of exits from VC funded companies in the Indian context.

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관련 논문AI추천

Managing Information Asymmetry Risks Using Deal Syndication and Domain Specialization: An Indian ContextJoshi, Kshitija아시아기술혁신학회 · Asian Journal of Innovation and Policy2018 · 제7권 제1호Venture Capitalist's Stake and Valuation of Privately-held Firms in IndiaArun Kumar Gopalaswamy, Ravi Teja, Rishabh Goswami아시아기술혁신학회 · Asian Journal of Innovation and Policy2022 · 제11권 제3호What Ecosystem Factors Impact the Growth of High-Tech Start-ups in India?Krishna Satyanarayana, Kshitija Joshi아시아기술혁신학회 · Asian Journal of Innovation and Policy2014 · 제3권 제2호Venture Capital Investments and the IPO performance of Chinese Firms박세열, 신현한, Meina Piao경영경제연구소 · 아태비즈니스연구2022 · 제13권 제2호Does Venture Capital Add Value? Evidence from the Chinese GEM김상준, 신하진, 이장욱, 최문섭, YinZhu Jin한국중소기업학회 · 중소기업연구2023 · 제45권 제4호Risk and Reward in Venture Capital Funds채준, 김지현, HYUNG-CHUL KU경영연구소 · Seoul Journal of Business2014 · 제20권 제1호

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