Ipo as one of divestments processes of venture capital funds

Abstract

The main subject of the following article is to introduce one of Polish most popular way of divestment used by venture capital funds - the Initial Public Offering. Venture capital, considered as an innovative source of financing, supporting especially SMEs, is also an important mechanism of introducing companies on the Stock Market. Entrepreneurs are often interested this form of divestment, as it is associated with numerous benefits, which strengthen the position of a company and deepen the trust to its managers. However, this method, at the same time, generates high costs and requires relatively long period of time for implementation. Therefore, mentioned way of divestment cannot guarantee to both - the entrepreneur and the investor the highest return on investment. However, it seems to be most suitable for projects in which the sufficiently high demand for shares can be forecasted. The main aim of this article is to bring issues concerning the ways of closing the investment by venture capital funds, emphasizing divestment through IPO. What is more, author wanted to underline the significance of public offering in influencing on subsequent activities of entities that have used mentioned form of financing