Innovation and performance: Evidence from venture capital-backed IPOs

I collect a comprehensive sample of 2213 Venture Capital-backed initial public offerings (VC-backed IPOs) between 1981 and 2004, including 842 VC-backed IPOs with successful patent application(s) five years before IPOs (VC-backed IPOs with patents) and 1371 VC-backed IPOs without patent filing(s) five years before IPOs (VC-backed IPOs without patents), and examine the two-year to five-year stock performance of these offerings. VC-backed IPOs with patents appear to outperform VC-backed IPOs without patents in both cross-sectional analyses and calendar-time portfolio analyses.