An Empirical Study On The Correlation Between Syndication Of Venture Capital Investment And IPO Market Performance

Venture capital is an important way for startup financing,and it has a positive impact on enterprise innovation,and enterprise innovation plays a vital role in China's economic transformation.Having a good risk investment mechanism is a major boost to the sustainable development of a country's economy.In this context,with the availability of data,research on venture capital is on the rise.With the growth of China's venture capital industry and the maturity of development,more and more start-ups are supported by syndication of venture capital investment.What is the difference between syndication of venture capital investment and individual venture capital? This is the starting point of this paper.This paper firstly sorts out and analyzes the domestic and foreign literatures on the relationship between venture capital and syndication of venture capital investment and the performance of the IPO market of the invested company.Based on the literature review,the paper analyzes the theory and puts forward the hypothesis.This paper takes 454 companies listed on A-shares from 2006 to 2015 and is supported by venture capital as the research object,empirically studying the relationship between the support of syndication of venture capital investment and the performance of IPO market.For the performance indicators of the IPO market,the IPO underpricing rate and the long-term abnormal return rate were selected.The empirical finding that the syndication of venture capital investment-backed company has a lower IPO underpricing rate and a higher long-term abnormal return rate than the separate venture capital,and combines the theory to analyze its internal motivation.In the following,this paper takes 159 companies with joint venture capital support among the 454 companies as the research object,and empirically studies the relationship between the heterogeneity of syndication of venture capital investment and the performance of IPO market.Specifically,it includes the heterogeneity of investment experience,the heterogeneity of equity ratio,and the heterogeneity of capital types.The empirical finding that the heterogeneity of equity ratio has positive impact on IPO underpricing and negative impact on the long-term performance of IPO market.Based on this,this paper suggests: In order to make venture capital institutions better help,encourage syndication of venture capital investment,form a venture capital market with diversified investment entities,and further improve the relevant mechanisms of China's capital market to promote the value of China's start-ups.For the secondary market investors,you can focus on the risk investment of the company to choose stocks to achieve value investment.