How Do Corporate Venture Capitalists Create Value for ...

Table 6b
Market Participants in CVC Backed and IVC Backed IPOs: Multivariate Tests
This table reports the results of the regression analysis of various market participants in IPOs between 1980 and 2004. Panel A presents the analysis of underwriter reputation using Carter-Manaster
reputation measure as dependant variable. Panel B presents the results with the institutional investor participation measured by the number of institutional investors with IPO holdings. Panel C reports
the analyst coverage measured by the number of analysts following an IPO. The independent variables are the VC backing dummy, the CVC backing dummy, number of CVCs, CVC share of total
amount invested by VCs, number of CVC in the same Fama French industry as the IPO firm (“CVC Industry Match”), underwriter reputation, number of analysts following the firm in the first year after
the IPO, and the number of institutional investors participating in the IPO. The control variables are size (log of Total Assets), share of the firm sold in IPO, size of VC investment (log of total amount
invested by all VCs), IPO firm operating performance characteristics prior to IPO, industry dummies, and year dummies. Robust t-statistics are reported in parentheses. ***, **, and * indicate
significance at the 1, 5, and 10 percent levels, respectively.
Panel A: Underwriter Reputation Panel B: Institutional Investor Participation Panel C: Analyst Coverage
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (12)
VC Backing Dummy 0.326 0.325 0.321 0.324 -1.063 -1.018 -1.293 -1.044 0.487 0.500 0.417 0.502
(2.54)** (2.53)** (2.49)** (2.52)** (1.00) (0.96) (1.22) (0.99) (2.01)** (2.07)** (1.80)* (2.08)**
CVC Backing Dummy 0.206 3.370 0.961
(2.82)*** (4.38)*** (4.09)***
Number of CVC 0.051 1.978 0.561
(1.41) (4.82)*** (3.97)***
CVC Share of Total VC
Investment
0.080 9.040 2.785
(2.31)*** (3.60)*** (2.30)**
CVC Industry Match 0.058 2.415 0.999
(1.09) (3.74)*** (4.27)***
Underwriter Reputation 0.899 0.907 0.916 0.911 0.198 0.200 0.203 0.200
(8.89)*** (8.99)*** (9.07)*** (9.04)*** (8.56)*** (8.70)*** (8.77)*** (8.71)***
Avg Age of Existing IVCs 0.008 0.008 0.008 0.008 0.038 0.037 0.042 0.033 -0.001 -0.001 0.000 -0.003
(2.70)*** (2.69)*** (2.69)*** (2.65)*** (1.44) (1.40) (1.59) (1.26) (0.13) (0.19) (0.07) (0.40)
Log (Total Assets) 1.089 1.089 1.089 1.089 6.405 6.378 6.386 6.374 1.119 1.112 1.114 1.109
(43.25)*** (43.16)*** (43.15)*** (43.14)*** (20.30)*** (20.22)*** (20.23)*** (20.20)*** (17.42)*** (17.36)*** (17.32)*** (17.33)***
Share of Firm Sold in IPO -0.526 -0.529 -0.533 -0.531 0.652 0.761 0.736 0.692 -0.941 -0.910 -0.912 -0.907
(3.46)*** (3.35)*** (3.32)*** (3.37)*** (0.56) (0.66) (0.67) (0.59) (2.91)*** (2.78)*** (2.58)*** (2.99)***
Log(Total Amount Invested
by VCs)
0.040 0.043 0.044 0.044 0.227 0.230 0.276 0.267 0.029 0.030 0.042 0.036
(3.16)*** (3.38)*** (3.50)*** (3.46)*** (1.90)* (1.94)* (2.34)** (2.26)** (1.18) (1.24) (1.72)* (1.52)
EBITDA/Sales 0.573 0.567 0.546 0.540 -0.086 0.394 -0.061 -0.666 -0.120 0.015 -0.100 -0.290
(1.99)** (1.97)** (1.86)* (1.83)* (0.05) (0.22) (0.04) (0.38) (0.27) (0.03) (0.26) (0.61)
CE in Total Assets 0.564 0.565 0.566 0.566 -0.936 -0.964 -0.959 -0.942 0.348 0.340 0.339 0.340
(2.11)** (2.11)** (2.12)** (2.12)** (0.59) (0.61) (0.60) (0.59) (0.92) (0.90) (0.90) (0.91)
R&D In Total Assets 0.009 0.009 0.009 0.009 -0.001 0.006 -0.001 -0.008 -0.003 -0.001 -0.002 -0.005
(2.44)** (2.42)** (2.30)** (2.27)** (0.03) (0.24) (0.03) (0.34) (0.43) (0.13) (0.46) (0.74)
Observations 4180 4180 4180 4180 4180 4180 4180 4180 4180 4180 4180 4180
R-squared 0.47 0.47 0.47 0.47 0.54 0.54 0.54 0.54 0.42 0.42 0.42 0.43
40