Equity financing choices as a market signal? Differences in CVC and IVC-backed companies’ Tobin’s Q post-IPO
Date of Submission
Campus Only Senior Thesis
Bachelor of Arts
2022 Michal H Bachar
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.
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.
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.