Do device start-ups that receive the highest market caps on IPO deliver the biggest rates of return to private investors? An analysis we've done (see chart below) seems to answer unequivocally yes.
We took device IPOs over the past two years and broke them out by range of post-money IPO valuations (greater than $100 million, between $50 and $100 million, and less than $50 million), comparing them by average pre- and post-money multiples of market cap to total private money raised. Our results showed that the large cap companies received post-money valuations that were, on average, over 14.5 times the amount of private money paid in prior to IPO
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