Venture capital (VC) firms play a crucial role in fostering the growth of startups by providing financial resources, strategic guidance and support in accessing capital markets. However, the impact of VC support on firm performance following an initial public offering (IPO) remains widely debated, particularly in emerging markets characterized by a distinct institutional and structural environment. This study provides evidence on VC support and its effect on firm outcomes after listing. The sample comprises 422 non-financial firms that went public between 2003 and 2019. Post-IPO performance is evaluated over 5 years after listing by employing both accounting-based and market-based metrics. After addressing concerns of selection bias and endogeneity, the study demonstrates that the impact of VC support is two-fold. While VC support is linked to lower operating performance and firm profitability, it is associated with higher market valuation for firms post-listing. This divergence implies that although VC involvement may not consistently translate into superior post-listing operating outcomes, the presence of VCs continues to serve as a credible indicator to investors, aligning with their certification role in influencing investor perceptions. This research presents novel findings, providing significant insights for issuers, managers, regulators and investors.
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