How Do Corporate Venture Capitalists Create Value for ...

Table 6a
Market Participants in CVC Backed and IVC Backed IPOs:
Univariate Tests
This table reports the cross-sectional distribution of underwriter reputation, institutional investor participation, analyst coverage, and venture
capitalists reputation for IPOs from 1980 to 2004. Panel A presents the analysis of underwriter reputation according to the Carter-Manaster
reputation measure updated by Loughran and Ritter (2002). It reports the percentage of IPOs with high-reputation underwriter (ranking of 8 or
higher) and average underwriter reputation for each IPO sub-sample. Panel B presents institutional investor participation statistics. It reports the
number of the institutional investors with IPO allocations, the institutional investor holdings as a percentage of shares sold in an IPO. Panel C
reports the degree of analyst coverage. “CVC” stands for IPO firms with at least one CVC investor. “IVC” represents IPO firms backed by IVCs
alone. “HCVC” stands for IPO firms where the CVCs’ share in total VC investment is above 20% while “LCVC” stands for the IPO firms with
small financial presence of CVCs (below 15%). ***, **, and * indicate significance at the 1, 5, and 10 percent levels, respectively, for t-test of
the equality of means of two sub-samples. The IPO and underwriter data are from SDC. The institutional investor holdings data are from
Spectrum Institutional (13f) Holdings Database of Thomson Financial. The analyst forecast data are from the I/B/E/S database. The measures of
venture capitalists reputation are computed based on Venture Expert data from SDC Platinum.
Measure CVC IVC Diff. HCVC LCVC Diff.
Panel A: Underwriter Reputation
% of IPOs with Highly Reputable
Underwriter
82.10 67.91 14.19*** 79.75 84.15 -4.40
Average Underwriter Reputation 8.02 7.45 0.56*** 7.91 8.06 -0.15
Panel B: Institutional Investor Participation
Number of Institutional Investors
Participating in IPO
26.87 19.21 7.66*** 27.50 26.85 0.65
Institutional Investor Holdings as %
of Shares Sold in IPO
86.11 67.03 19.08*** 86.90 88.00 -1.10
Panel C: Analyst Coverage
Percentage of IPOs with Analyst
Coverage
93.7 86.1 7.6*** 88.1 95.1 -7.00***
Number of Analysts Following 5.77 4.08 1.69*** 6.06 5.64 0.43
Panel D: Reputation of Existing IVCs
VC Amount Invested Since 1965 452.59 479.07 -26.48 450.57 436.89 13.68
VC Average Age 15.49 14.97 0.52 14.87 15.99 -1.12
VC Funds Raised During 5 Years
Prior to IPO
435.55 379.22 56.33* 425.20 434.25 -9.05
VC Rounds Invested 423.08 366.04 57.04** 425.02 415.80 9.22
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