Graduation Year
2023
Date of Submission
12-2022
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Professor Hughson
Rights Information
2022 Michal H Bachar
Abstract
This paper presents evidence that portfolio companies backed by corporate venture capital (CVC) firms have higher Tobin’s Q values than companies backed by independent venture capital (IVC) firms on their IPO date. Using a nearest-neighbor matching implementation of the propensity score matching approach to match CVC and IVC-backed companies, I find that the difference in valuation is robust to varying timeframes of IPOs and the prestige levels of individual VC firms. I argue that CVC-backing may serve as a positive signal for investors but recognize that the signal has limited utility since the difference in valuation is influenced by variable portfolio company characteristics.
Recommended Citation
Bachar, Michal, "Equity financing choices as a market signal? Differences in CVC and IVC-backed companies’ Tobin’s Q post-IPO" (2023). CMC Senior Theses. 3212.
https://scholarship.claremont.edu/cmc_theses/3212
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.
