Journal article
Predicting success in entrepreneurial finance research
Journal of corporate finance (Amsterdam, Netherlands), Vol.81, 102359
08/2023
DOI: 10.1016/j.jcorpfin.2023.102359
Abstract
We study the relationship between buyout and venture capital (VC) funds’ returns, and more typically available proxies—exits via M&A or IPO. We further explore the effects of filters on the selection of M&As and IPOs (to emphasize successes), on the relationship. We show that some of these filters can reduce the count of exits by as much as 80% without significantly improving the correlation between exits and fund returns. We also show that for venture capital funds, counting acquisitions that are at least twice the amount of funding raised results in the best correlation between exits via an acquisition and fund returns. Finally, when the sample comprises young startups – that are perhaps not yet ready for any form of exit – follow-on funding, employment, website ranking, and patent activity can be used as proxies for exits in place of IPOs or acquisitions.
Details
- Title: Subtitle
- Predicting success in entrepreneurial finance research
- Creators
- Emmanuel Yimfor - University of MichiganJon A. Garfinkel - University of Iowa Tippie College of Business, United States of America
- Resource Type
- Journal article
- Publication Details
- Journal of corporate finance (Amsterdam, Netherlands), Vol.81, 102359
- DOI
- 10.1016/j.jcorpfin.2023.102359
- ISSN
- 0929-1199
- eISSN
- 1872-6313
- Publisher
- Elsevier B.V
- Language
- English
- Electronic publication date
- 02/03/2023
- Date published
- 08/2023
- Academic Unit
- Finance
- Record Identifier
- 9984380509602771
Metrics
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