This study analyzed that which types of groups contribute more to mitigating low-cost issuance after dividing venture capital into IVC and CVC. This study discussed the differentiation of the certification role through analysis of investment share and public offering ratio between CVC and IVC on the sample of 87 companies invested by CVC and 74 companies invested by IVC among the KOSDAQ market during 10-year research period from January 1, 2008 to December 31, 2017. The results are as follows.
First, an analysis of which type more contributes to the mitigation of low-cost issuance between the two groups showed that CVC had a systematically significant negative (-) effect on abnormal return and cumulative abnormal return than IVC at section AR (1.1), CAR (1.3), CAR (1.7). This can be judged that CVC, which prefers investment for strategic purposes, is more faithful to its certification role than IVC, which pursues return on investment for financial purposes.
Second, the analysis of whether the investment share of venture capital invested in venture business shows low abnormal return when venture business do IPOs. showed a significant difference between each section AR (1.1), CAR (1.3), CAR (1.7), CAR (1.30). The higher the share of venture capital investments invested in venture business in each segment, the more systematically significant negative impact on abnormal return of venture IPOs. The higher the share of the CVC invested in venture business, the more likely it an be accepted as the certification role of CVC to mitigate the low-cost issue of the venture IPO.
Third, an analysis of whether the abnormal return is low for venture business’ IPO according to the public offering ratio found that the higher public offering ratio, the more significant negative (-) effect was found in the interval AR (1.1), CAR (1.3). This can be seen as a certification role of venture capital, which distributes risks and increases efficiency of operation, while reducing low-cost issuance of IPO. Therefore, it can be judged that the higher the public offering ratio, the more closely the IPO price is decided to market value, demonstrating the certification role of venture capital that mitigates the low-cost issuance of IPO.
However, there is a need to identify the certification role of venture capital by dividing the target companies according to the level of he CVC and IVC investment share and revealing the portion of the investment share that shows a slightly lower abnormal return.