VC-Backed IPOs Outperform Market

Venture-backed companies outperformed the market by 4.2 per cent over 500 trading days, according to research conducted by the European Private Equity and Venture Capital Association (EVCA). The study shows that VC-backed companies floated on the stock exchange ‘significantly outperform other IPOs’.

The EVCA study looked at post-IPO performance of nearly 400 large VC-backed companies on five markets including NYSE, London Stock Exchange, Nasdaq, SIX Swiss Exchange and Deutche Borse. The results proved that venture-backed companies performed better early on, outperforming by 9.6 per cent in the first 250 trading days and by 11.7 per cent in the first 125 days.

In the report, Hendrik Brandis, chairman of EVCA’s venture platform said: ‘There is a clear and consistent trend that when institutional-grade venture capitalists bring companies to public markets, they perform significantly better than other equivalent companies over a course of years.’

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