Initial Public Offerings, Financial Sponsor Backing And Its Effects on Portfolio Firms

This dissertation examines sponsor backing in the context of portfolio firm initial public offerings (IPOs).

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Financial sponsors—i.e., private equity (PE) and venture capital (VC) investors—control major parts of the corporate world in developed economies. While prior literature indicates that firms mostly benefit from sponsor backing, gaps in our understanding of how sponsors impact portfolio firms remain. In three studies, this dissertation examines sponsor backing in the context of portfolio firm initial public offerings (IPOs).

The first study examines long-term investment in the years following the IPO. Focusing on acquisitions as well as capital expenditures and research development spending in the years following the IPO, it seeks to examine the impact of sponsor backing at the time of the IPO on growth investments in the years following the IPO. The second and third studies focus on the pre-IPO process of pricing the portfolio firm IPO. Focusing on IPO underpricing, they seek to understand the effect of sponsor backing on the pricing of portfolio firms for their IPOs as well as the role played by sponsor-specific incentives such as fundraising activities.