Graduation Year


Date of Submission


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Richard C.K. Burdekin

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© 2019 William M Buckstaff


This study examines the effect that emphasizing company growth instead of revenue has on first day and first month initial public offering (IPO) returns for venture-capital backed companies. I define this growth oriented business model as viral. There has been increasing market consolidation with tech firms that experience high network effects and are more viral, so I hypothesized that new entrants to this space would be treated with more scrutiny and have lower IPO returns. Virality is defined as the amount of a company’s market share and revenue that can be explained by achieving significant network effects. I measure virality by assessing the amount of emphasis companies place on growth as opposed to revenue and profitability. This was done by examining consistent elements throughout my sample companies’ IPO prospectuses to gauge the network effect they were seeking to achieve. My findings yielded significant results contradictory to my hypothesis: companies that are more viral have higher first day returns than their non-viral counterparts.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.