Research Summary

Long-Run Performance Following Equity Issue

by Paul A. Gompers


In an effort to establish how the transition from private to public firm affects performance, Paul A. Gompers is examining the long-run performance of companies that issue equity in an initial public or seasoned offering. He is also attempting to determine whether involvement with a venture capital backer improves performance. Gompers is using recent innovations in multifactor asset-pricing models to evaluate firm performance and is developing new methods of measuring performance in varied settings. His findings to date demonstrate that underperformance is concentrated in small companies, not backed by venture capitalists, that went public in the early 1980s.