The authors thank the two Limited Partners for providing the data, Antoinette Schoar, Josh Lerner, Alexander Ljungqvist and an anonymous referee for their comments and Donna Harris for her research assistance.
Venture capital funds and the public equity market
Version of Record online: 22 OCT 2010
© 2010 The Authors. Accounting and Finance © 2010 AFAANZ
Accounting & Finance
Volume 51, Issue 3, pages 764–786, September 2011
How to Cite
McKenzie, M. D. and Janeway, W. H. (2011), Venture capital funds and the public equity market. Accounting & Finance, 51: 764–786. doi: 10.1111/j.1467-629X.2010.00373.x
- Issue online: 1 AUG 2011
- Version of Record online: 22 OCT 2010
- Received 14 August 2009; accepted 20 June 2010 by Robert Faff (Editor).
- Venture capital;
- Initial public offering;
- Hot issue market
This paper considers the relationship between the public equity market and the returns to venture investing using a dataset which is derived from the records of two large limited partners who have been investing in venture capital for almost 30 years. Evidence is found to suggest that market conditions over the investment cycle, and exit conditions at the time of exit in particular, are an important determinant. This paper also investigates whether any other aspects of the venture investment process respond to events in the broader market. While general trends are evident in the venture investment cycle, only the intensity of the investment process is found to respond to events in the public equity market.