Venture-Capital-Backed IPO

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DEFINITION of 'Venture-Capital-Backed IPO'

The selling to the public of shares in a company that has previously been funded primarily by private investors. The alternative to an IPO for a venture-capital-backed company is an acquisition (getting purchased by another company). Both options are known as "exit strategies" because they allow venture capitalists and entrepreneurs to get money out of their investments.

BREAKING DOWN 'Venture-Capital-Backed IPO'

Multiple sources regularly report on both venture-backed IPOs and M&A volume. In lean economic times, there tend to be fewer venture-capital-backed IPOs because of low investor confidence. As a result of the financial crisis, 2008 and 2009 saw record low numbers of venture-capital-backed IPOs. Examples of companies that were once venture-capital-backed IPOs are Tesla Motors and Open Table.

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RELATED FAQS
  1. In an IPO, who is a greensheet distributed to and for what purpose?

    One of the most talked about documents that arises in the process of introducing a new issue is the greensheet. This is an ... Read Full Answer >>
  2. How does an IPO get valued? What are some good methods for analyzing IPOs?

    The price of a financial asset traded on the market is set by the forces of supply and demand. Newly issued stocks are no ... Read Full Answer >>
  3. How long does it take to execute an M&A deal?

    Even the simplest merger and acquisition (M&A) deals are challenging. It takes a lot for two previously independent enterprises ... Read Full Answer >>
  4. How does investment banking differ from commercial banking?

    Investment banking and commercial banking are two primary segments of the banking industry. Investment banks facilitate the ... Read Full Answer >>
  5. What kind of assets can be traded on a secondary market?

    Virtually all types of financial assets and investing instruments are traded on secondary markets, including stocks, bonds, ... Read Full Answer >>
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    It does not make sense to find the breakeven point using a company's payback period. A company's payback period is concerned ... Read Full Answer >>

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