• Hans Lennart Jeppsson University of Gothenburg



Venture capital, venture investments in public equity, VIPE, biotechnology


This study examines a large sample of venture investments in public equities (VIPEs) in the biotechnology and pharmaceutical industry over the period 1995-2014. The results of the study are threefold. First, and contrary to widely held beliefs, there has been no significant increase in the number of VIPEs over time. In fact, both in terms of dollar amount as well as the number of VIPE transactions have actually went down post the record year in 2009. Second, this study documents that returns profiles from the public venture capital market share many similarities to the returns in the private VC market: few big winners, but overall a high loss rate. Approximately seven investments out of ten in public firms generate a loss. Third, the analysis of private investments in public equities shows that venture capitalists outperform other competitors, such as hedge funds and mutual funds. From a management perspective, venture investments in public equity provide several benefits including providing an additional source of potential funding, aligning the investment horizon of venture capitalists with other long-term investors, certifying the quality of the firm and contributing to the long-term success.

Author Biography

Hans Lennart Jeppsson, University of Gothenburg

Hans L. Jeppsson, Ph.D., is the founder and managing partner of BioValuation Advisors, a research-driven boutique advisory firm specialized in asset valuation in the life sciences industry. Hans is also an Assistant Professor at the Department of Business Administration at the University of Gothenburg, Sweden. He was previously a biotechnology analyst at Danske Bank and prior to that held several positions within preclinical R&D at AstraZeneca.


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