Abstract
This paper addresses the validity of certification and insider selling hypotheses within the context of new issues. Comparisons of venture capital backed and non venture-backed issues with similar offering characteristics show that issuers with venture capital affiliation are more underpriced than non venture-backed IPOs and insider selling results in decreased underpricing. These results contradict the findings of previous venture capital certification studies {Barry (1990), Megginson and Weiss (1991), and Lin and Smith (1997)}, but are consistent with recent work that examines grandstanding {Lee and Wahal (2002)} and insider selling decisions during hot market periods {Ljungqvist and Wilhelm (2003)}.
Recommended Citation
Koshiw, Nicholas S.
(2004)
"Re-examining Venture Capitalist Certification and Insider Selling Decisions during the 1990s.,"
University Avenue Undergraduate Journal of Economics: Vol. 9:
Iss.
1, Article 2.
Available at:
https://digitalcommons.iwu.edu/uauje/vol9/iss1/2
