The effects of pre-IPO corporate activity on newly-public firms' growth

We investigate firms' pre-IPO corporate activity. We find that firms involved in extraordinary - i.e., beyond momentum - amounts of acquisitions, JVs, and alliances in the year leading up to their IPOs (1) are more likely to engage in post-IPO corporate activity; and (2) enter into their first post-IPO transaction twice as fast as other firms. Our results indicate that signaling via extraordinary corporate activity can have a significant effect on entrepreneurial firms' growth. The implications are discussed.