Venture-backed private equity valuation and financial statement information

• 成果类型: Article
• 署名作者: Armstrong, C; Davila, A; Foster, G
• 署名单位: Stanford University; University of Navarra; IESE Business School
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-006-6398-8
• 发表日期: 2006
• 页码: 119-154
• 关键词: VALUE-RELEVANCE; MARKET

摘要

The relationship between (a) private and public equity market valuations and (b) financial statement information is examined for a sample of 502 venture capital backed companies from six different industries over the 1993-2003 period. Financial statement information explains a sizable component of the levels of and changes in valuation in both the Pre-IPO and Post-IPO periods. The findings support prior research for Post-IPO companies that revenues are value enhancing and costs are value diminishing. For the Pre-IPO period, we find that cost of sales; sales, marketing, general and administrative; and research and development are value enhancing-even when revenues are included ill the analysis. This is consistent with costs incurred by early-stage, venture-backed companies having a strong investment aspect as the companies build a platform/infrastructure to grow revenue and validate their business model(s). We document the growth of early stage companies for revenues and costs in both calendar time (by round of private equity financing) and event time (relative to their eventual IPO).