Effects Of Venture Capital On IPO Underpricing

Venture investment is an important component of multi-level capital market inChina, especially the influence for the primary market is increasingly obvious. Thispaper selects719companies listed on small plates and355ones listed on GEM toexplore how the venture capital influence on companies listed in all aspects。This paper studys the effect of venture investment of SME board and GEM on thelisting Corporation IPO by SPSS18test and multiple regression method.Researchshows that, with the support of venture capital companies IPO, underpricing rate ishigher than that of no venture capital backed companies, which confirms the"reputation" adapt to our capital market. At the same time, venture capital is to speedup the process of listed enterprises, although there is no venture capital backedcompanies listed the date of the gap is not large, but the gap is significantly related.Then this paper further devideson the background of venture capital that includesownership, private or government background, as well as private reputation on IPOunder effect of valence rate. The results show that the higher the venture investmentratio is, the greater underpricing degree investment of the enterprise IPO need to pay,and this is consistent on "reputation". They also argue that the companies ofgovernment background have higher IPO underpricing rate, just as the venturecapitals of government background stand the national industrial policy mission in acertain extent, so the choice of investment projects is not only measured byperformance in the index, which so that IPO requires a higher IPO price transfer. Theventure capital is established to measure its reputation, While the regression result isnegative, but not significantly related.