23 June 2022 Financial Analysts Journal Volume 78, Issue 4

Effects of Venture Capital Mega-Deals on IPO Success and Post-IPO Performance

  1. Nico Lehnertz
  2. Carolin Plagmann
  3. Eva Lutz
Do venture capital mega-deals provide a quality signal for equity investors in the event of an IPO? Based on a study of hundreds of IPOs, the authors find that mega-deals are linked with superior IPOs and favorable post-IPO performance.
Read the Complete Article in the Financial Analysts Journal CFA Institute Member Content


Venture capital financing rounds with transaction volumes of 100 million US dollars or more have become an integral part of the US venture capital market within the last decade. We aim to determine whether such mega-deals are a quality signal for equity investors in the event of an IPO. Based on a sample of 364 US IPOs, we find that companies that have received a venture capital mega-deal perform, on average, superior IPOs and exhibit favorable post-IPO performance.

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