Comparing Internal and External IPO Risk Factors Influence on Investor Valuation and Survival

As a firm prepares for IPO, the Securities and Exchange Commission mandates that managers must record risks to their firms’ survival or performance in the prospectus. This study illustrates a major gap between risk factors that investors initially focus on and the true determinants of long-term success. More specifically we propose that external risk factors (market risks, legal risks, and government regulations risks) have a more negative...