Venture Capital and Firm Performance

Jaeho Lee is Associate Professor at the Department of International Business and Trade, Kyung Hee University, Seoul, Korea. He was Research Fellow for Centre for Business Research at the University of Cambridge and Birmingham Business School. He won the 2010 Best Paper Award from the Korean Association of Small Business Studies for his paper on venture capital and its impact on firm valuation.

'This is a thorough analysis, using original data sets, of the complex interplay between financial institutions and markets. The Korean secondary stock market, KOSDAQ, during the dot-com bubble and burst between 1999 and 2001 provides the landscape for the study. Lee examines the long-term performance of stocks from IPOs according to the nature and quality of venture capital participation, examining whether underpricing and poor long term performance might be associated with, for example, the type of ownership of venture capital companies. Prior to and during the period, there were significant changes in the sources of Korean company finance, adding interesting, but complicating factors. The findings are highly relevant to governments, regulators, financial analysts, practitioners and historians. The book adds significantly to the broader debate between market efficiency, on the one hand, and agency bias and information asymmetry on the other.' — Emeritus Professor James Slater, Birmingham Business School, University of Birmingham'This book provides an insightful analysis of venture capital and IPOs in Korea. Professor Lee provides a thorough analysis of data and insightful commentary on the market. Academics, practitioners, and policy makers with an interest in venture capital and IPOs should read this book.' — Douglas Cumming, Professor of Finance and Entrepreneurship, The Schulich School of Business, York University

• 1. Introduction2. Institutional Description of the Venture Capital Industry and the IPO Market3. Literature Review and Formulation of Hypotheses4. Data and Methodology5. The Characteristics of IPO Firms on KOSDAQ 1999-20016. Underpricing7. Long-term Performance8. Conclusion