Wealth and the effects of founder management among IPO-stage new ventures

S. Trevis Certo, Jeffrey G. Covin, Catherine M. Daily, Dan R. Dalton

Research output: Contribution to journalArticle

233 Scopus citations

Abstract

IPO underpricing is inherently related to both wealth retention and wealth creation. This paper reviews the relationship between IPO underpricing and wealth, then presents the results of an empirical study of the impact of CEO founder status (i.e. is the CEO also the founder?) on IPO underpricing. Results based on data collected from 368 IPO-stage new ventures suggest that founder management has a positive impact on IPO underpricing, and that the founder management-underpricing relationship is moderated by (a) the IPO market share of the investment banker employed and (b) the proportion of insiders on the IPO firm's board of directors.

Original languageEnglish (US)
Pages (from-to)641-658
Number of pages18
JournalStrategic Management Journal
Volume22
Issue number6-7
DOIs
StatePublished - Jun 1 2001
Externally publishedYes

Keywords

  • Founder management
  • Going public
  • Initial public offerings (IPOs)
  • Underpricing

ASJC Scopus subject areas

  • Business and International Management
  • Strategy and Management

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