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

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

doi:10.1002/smj.182

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 journal › Article › peer-review

294 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 language	English (US)
Pages (from-to)	641-658
Number of pages	18
Journal	Strategic Management Journal
Volume	22
Issue number	6-7
DOIs	https://doi.org/10.1002/smj.182
State	Published - Jun 2001
Externally published	Yes

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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10.1002/smj.182

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title = "Wealth and the effects of founder management among IPO-stage new ventures",

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.",

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AU - Covin, Jeffrey G.

AU - Daily, Catherine M.

AU - Dalton, Dan R.

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AB - 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.

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

Abstract

Keywords

ASJC Scopus subject areas

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