Using a sample of 1,593 US firms that go public between 1990 and 2007, we find that VC-backed IPOs experience less financial distress risk post-offering than do comparable non-VC-backed IPOs. After controlling for endogeneity, we find this is related to the screening done by VC-investors, who...

Entrepreneurs are often faced with problems regarding start-up financing. But compared to novice entrepreneurs, experienced entrepreneurs should have both more knowledge and better contacts, which should potentially reduce the occurrence of problems and affect finance composition. However,...