국내벤처기업의 상장의도에 따른 IPO 전략

One of the most important ways for start-ups to gain resources as well legitimacy is to conduct an IPO. By going public firms increase their legitimacy in the business community, improve their access to debt financing, and create a means of exit for major shareholders (Sutton and Benedetto, 1988). Thus, the IPO has been used as a measure for start-up performance since conventional measures for performance, such as profit or sales, are not available for very young firms (Deeds et al., 1997 Stuart et al., 1999). In Korea, over-the-counter (OTC) stock market has opened on April 1, 1987 to meet both the needs of investors who want high risk-return opportunities and emerging enterprises that have to finance capital for growth. The OTC market is not a formal organization with membership requirements or a specific list of stocks deemed eligible for trading. To have their shares traded on the OTC market, the unlisted companies have to register with Korean Securities Dealers Association (KSDA).Then, their stocks are traded on the KOSDAQ stock market through its advanced automated trading system. KOSDAQ market has opened on July 1, 1996.Its function can be stated as follows : (1) to facilitate corporate financing for promising small and medium-sized firms and venture businesses, (2) to provide new exciting investment opportunities for investors, and (3) to help venture capital firms redeem investment capital and set up new investment funds. KOSDAQ is the Korean version of America's National Association of Securities Dealers Automated Quotation (NASDAQ) System. Since 1997, the Korean government has operated a “venture company certification system,” which registers promising technology-based small and medium-sized firms as venture companies in order to facilitate starting up of new companies and enhance their entrepreneurship. Until now, about 15,400 firms have gained the venture company certification but a small minority of these new ventures went into IPO. Therefore, preparing a firm to go public has become a major challenge for entrepreneurial managers of high technology firms. Then, which start-ups go public? Many researchers have studied this question. For example, Wilbon(1999, 2002) showed that high-technology firms who survive at least five years after an IPO have more intellectual property rights, more experienced senior executives, and spend less on R&D as a proportion of sales at the time of the IPO than their cohorts. Deeds et al.(1997), showed that the total amount of capital raised through a firm’s IPO is affected by the scientific capabilities of the firm including the location of the firm, the quality of the research staff, and the number of products under development. Another empirical study by Chang(2004) found that three factors positively influenced a start-up’s time to IPO the better the reputations of participating venture capital firms and strategic alliance partners were, the more money a start-up raised, and the larger was the scale of a startup’s network of strategic alliances. However, technology-related factors that are very important to technology-based firms are not considered sufficiently. Therefore, the first objective of this paper is to find the effects of technology-related factors, i.e. sourcing and timing of technology acquisition on IPO. There are several motivations or benefits for going public. Arkebauer(1991) argued that the most important reason for going public was to infuse a significant amount of investment capital into a firm. In other words, an IPO is likely to be driven by expectations of future growth opportunities. On the other hand, Brau and Fawcett(2006) found the primary motivation for going public is to facilitate acquisitions. Pagano et al. (1998) argued that companies appeared to go public not to finance future investment and growth, but to rebalance their accounts after high investment and growth. These are likely to reflect the desire to exploit a window of opportunities suggested by Ritter(1991). Anyway, the firm will attempt to maximize the value by finding the optimal timing for its IPO depending on the motivation for going public. Then, when is the optimal timing for going public? Benninga et al.(2005), studied the dynamics of IPOs by examining the trade-off between an entrepreneur’s private benefits of control, which are lost whenever the firm is publicly traded, and the gains from diversification of capital. Jovanovic and Roussear(2001) view the duration of the pre-IPO waiting phase as the result of a trade-off between firm learning and the opportunity cost related to delay to market. The greater the opportunity cost, in other words, the better the technology or business model, the sooner a firm will go public. A proposition that firms having greater capital intensity and are characterized by greater technological uncertainty go public earlier has been made by Chemmanur and Fulghieri(1999). These researches are based on the theoretical model and their results are not from empirical studies. Thus, the second objective of this paper is to empirically find the optimal IPO timing with the motivation for going public. This study is focused on determining the optimal timing for IPO by analyzing the effects of IPO both on the value of a firm at the time of IPO and on the post-IPO performance. This study is unique in that it analyzes the timing of IPO with a two-equation recursive system model. In ex-ante stage, the time to an IPO is analyzed with several factors the experience of CEO, venture capital financing, the sourcing of technology, the timing of technology acquisition, R&D activities and other firm characteristics. In ex-poststage, the effects of IPO timing on the probability of future acquisition and the future growth opportunity are analyzed. This study guides us into the policy for start-ups as well their strategy for IPO. In the empirical analysis, I use the corporate disclosure data including IPO prospectus and data for patenting indicators of 201 high-technology start-ups(36 BT firms and 165 IT-H/W firms) that are registered on the KOSDAQ between 2000 and 2004. Key findingsof this study is that a quick acquisition of the first technology is very important to lead the start-up to an early IPO regardless of the type of technology sourcing, while active internal development becomes more important when it is near to IPO. This result stresses the timing of technology acquisitionrather than the type of technology sourcing at the beginning of the business. In addition, the strategy for IPO timing should be different depending on the motivation of going public. To capture the future growth opportunity, start-ups should improve their chances of going public more quickly. If the primary motivation of an IPO is to exploit the window of opportunities, e.g. acquisition, start-ups had better wait refining the enterprise’s idea and strategy until the stock market becomes bullish. This paper is organized as follows. Section 2 describes factors influencing the time to an IPOand hypotheses on the effects of an IPO. Section 3 provides methodology including a detailed description of the data and a regression model. Section 4 presents the regression results. Lastly, concluding remarks summarize the key findings and suggest implications.