The Implications of Private Funding Frequency on Investment Performance– The Relation Between Deal Number at IPO and the Likelihood of a Down Round IPO
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School of Business |
Bachelor's thesis
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Author
Date
2019
Department
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Mcode
Degree programme
Rahoitus
Language
en
Pages
20+5
Series
Abstract
Using a sample of 282 venture-backed initial public offerings in the U.S. between 2010 and 2018, I study the relation between the IPO Deal Number, i.e. the investment rounds received at IPO, and the likelihood of a down round IPO. Consistent with e.g. Forbes et al. (2010) and Brougham and Fried (2012), I find that for various reasons, investors avoid down rounds, which seems to cause valuation inflation as the deal number increases, increasing the likelihood of a down round IPO. This study also adds on to previous research on venture performance and return determinants by being the first study focusing on the relation between deal frequency and down round IPOs.Description
Thesis advisor
Kokkonen, JoniKeywords
Venture Capital, IPO, Down Round, Deal Number, Deal Frequency
