Venture Capital Backing, Investor Attention, and Initial Public Offerings

  title={Venture Capital Backing, Investor Attention, and Initial Public Offerings},
  author={Thomas J. Chemmanur and Karthik Krishnan and Qianqian Yu},
  journal={Entrepreneurship \& Finance eJournal},
We propose and empirically analyze a new channel through which venture capitalists (VCs) may add value at IPO to the private firms that they invest in. We hypothesize that the IPOs of VC-backed firms garner greater “investor attention” (in the sense of Merton (1987)), allowing the IPO underwriters of such firms to perform two information-related roles more efficiently during the IPO book-building and road-show process: information dissemination, where the lead underwriter disseminates noisy… 
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