Private or Public Equity? The Evolving Entrepreneurial Finance Landscape / Michael Ewens, Joan Farre-Mensa.

Format:

Book

Author/Creator:

Ewens, Michael.

Contributor:

National Bureau of Economic Research.

Farre-Mensa, Joan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29532.

NBER working paper series no. w29532

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

The U.S. entrepreneurial finance market has changed dramatically over the last two decades. Entrepreneurs raising their first round of venture capital retain 30% more equity in their firm and are more likely to control their board of directors. Late-stage startups are raising larger amounts of capital in the private markets from a growing pool of traditional and new investors. These private market changes have coincided with a sharp decline in the number of firms going public--and when firms do go public, they are older and have raised more private capital. To understand these facts, we provide a systematic description of the differences between private and public firms. Next, we review several regulatory, technological, and competitive changes affecting both startups and investors that help explain how the trade-offs between going public and staying private have changed. We conclude by listing several open research questions.

Notes:

Print version record

December 2021.