Effects of Venture-Capital Firms on the Degree of Underpricing in Initial Public Offering of Companies Backed by Them

This paper introduces main underpricing literature on venture-capital backed companies,by using these principles we analyzed the differences between venture-backed and non venture-backed companies in the small and medium-sized enterprise stock market,the result is that the former suffer greater underpricing than the latter,further study shows this can be explained by the theory of adverse selection proposed by Amit et.al.~([1]).