Analyst recommendations for VC and non-VC backed IPOs

Woan-lih Liang*, Tsui Ting Liu

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


This paper investigates and compares analyst recommendations to venture capital backed (VC backed) and non-venture capital backed (non-VC backed) initial public offerings. While some previous studies reveal better performance for VC backed over non-VC backed IPOs, other studies have found no performance improvement effect. This inconsistent conclusion regarding the VC backing effect and the accuracy with regard to the predictability of analyst recommendations induce us to examine differences in VC and non-VC backed IPOs from the analyst's perspective. We also examine firm characteristics that analysts consider when researching start-ups to assess the actual impact of the VC backing effect on analyst recommendations. Results indicate that analysts do tend to issue better recommendations for VC backed IPOs than for non-VC backed IPOs.

Original languageEnglish
Pages (from-to)57-66
Number of pages10
JournalInternational Research Journal of Finance and Economics
StatePublished - 1 Aug 2011


  • Analyst recommendation
  • Initial public offerings
  • Venture capital

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