Business, Management and Accounting
a year ago

Strategic shareholders influence IPO disclosure to protect proprietary information.

SSRN Electronic Journal
Strategic Shareholders and IPO Disclosure: Evidence from Corporate Venture Capital
Yue Zheng

Paper Summary

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The article shows that companies backed by corporate venture capitalists (CVCs) are more likely to keep important information secret when going public. This is because CVCs have both financial and strategic reasons to protect sensitive details that could harm their business. The study looked at IPO firms supported by CVCs and found they often hide key information in their public documents. This is especially true for CVCs with strong strategic interests. Overall, the research reveals how big shareholders' strategic goals can impact what companies choose to disclose when going public.