This Comment considers the results of Barry and Turki's research data that indicates that investments perform differently depending on whether innovation is financed by private or public equity investment. The Comment posits two hypotheses for the differential performance. The first highlights ex ante differences between private and public subsamples, that is that the financing choice separates good prospects from bad. The second hypothesis focuses on ex post differences in performance that results from differences in governance structure and incentives created by the structure of public and private equity investment. The ex ante separation hypothesis and the ex post performance hypothesis are not necessarily mutually exclusive; the data presented by Barry and Turki are consistent with either or both hypothesis.
Banking and Finance Law | Law | Securities Law
Ronald J. Gilson,
Understanding the Choice Between Public and Private Equity Financing of Early Stage Companies: A Comment on Barry and Turki,
J. Small & Emerging Bus. L.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/3541