Academic literature, practitioners, courts, and regulators routinely assert that both private and subsidiary targets sell at discounts relative to public targets. However, the empirical evidence to support this conclusion is thin. Our work alters the methodology from prior research to avoid...

Using a sample of venture capital-backed firms going public, we analyze the role played by perceived valuation changes on IPO underpricing. We consider the full trajectory of perceived valuation changes in a firm's value from its last VC round, to IPO filing, and ultimately to IPO price. We find...