A quantitative comparative study on VC-backed and non-VC-backed companies’ performance in post-IPO periods A Study on the European markets

Abstract

This thesis investigates the performance differences between venture capital backed companies and non-venture capital backed companies following an IPO in the European market. The study employs an OLS regression model, using change in stock price through simple buy and hold returns and change in ROA level as performance metrics, primarily focusing on the one-year period after a company’s IPO. In addition, a secondary analysis was conducted, analyzing the change in stock price after 180 days and the change in ROA over 2 and 3 years, respectively. The model controls for factors such as proceeds, industries, and countries, to isolate the impact of venture capital firms.

The final data set includes 1,813 firms across Europe that went public between 2004 and 2023. The findings do not establish any significant results of outperformance among venture capital-backed IPOs. However, the results suggest a tendency of better performance among venture capital-backed companies in the post-IPO periods. These results provide an interesting discussion as they both align with and contradict previous studies on the subject.