VENTURE CAPITALISTS AND THE DECISION TO GO PUBLIC

This paper examines the timing of initial public offerings and private financings by venture capitalists. Using a sample of 350 privately he ld venture-backed biotechnology firms between 1978 and 1992, 1 show th at these companies go public when equity valuations are high and emplo y private financings when values are lower. Seasoned venture capitalis ts appear to be particularly proficient at taking companies public nea r market peaks. The results are robust to a variety of controls and al ternative explanations.