Researcher ORCID Identifier
0009-0001-8085-5177
Graduation Year
2025
Date of Submission
12-2024
Document Type
Open Access Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
William Lincoln
Terms of Use & License Information
Rights Information
© 2024 Aryaman S Khosla
Abstract
This study investigates the components that shape the probability of a venture capital (VC) backed company’s ability to transition from private to public markets through an Initial Public Offering (IPO). The study employs logistic regression models to analyze firm-specific and funding-related determinants of IPO likelihood. Key predictors in this study include total VC funding, number of VC rounds, average deal size growth, size of first round, average days between rounds, company age, number of employees, and primary industry sector. The findings reveal that higher total funding increases IPO likelihood, highlighting the critical role of robust capital access in fueling growth and preparedness to transition to public markets. Accelerated funding, indicated by a lower average number of days between venture rounds, emerges as a positive predictor of IPO likelihood, underscoring the importance of momentum in sustaining a company’s growth. Conversely, a higher number of total venture funding rounds negatively impacts IPO likelihood, reflecting internal challenges necessitating recurring capital injections and issues resulting from equity dilution. Company maturity and a larger employee base both positively influence IPO outcomes, indicating that organizational scale and operational stability are vital for a transition from private to public markets. A sectoral analysis identifies Healthcare, Information Technology, and Energy as conducive environments for higher IPO likelihood. Addressing gaps in existing literature, these results provide a strategic framework for venture capital firms to optimize their funding rounds and investment portfolios by targeting high-growth sectors, streamlining funding timelines, and prioritizing strategies that enhance IPO potential in their portfolio companies.
Recommended Citation
Khosla, Aryaman Shiv, "Startup Equity to Stock Exchange: Key Drivers in Venture-Backed IPO Journeys" (2025). CMC Senior Theses. 3761.
https://scholarship.claremont.edu/cmc_theses/3761
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