Abstract
Virtually all Initial Public Offering (IPO) prospectuses feature lockup provisions that limit pre-IPO shareholders' share sale for some period of time after negotiations start. The aim of this article is to analyse voluntary lockups in Italy. We show that lockups are considerably longer and heterogeneous compared to the US or European evidences, and their duration and size serve primarily as a commitment device to alleviate the moral hazard problem faced by incumbent shareholders. We document considerable differences in lockup clauses among main shareholder classes, with venture capitalists and outside investors having considerably lower percentages of owned shares restricted for sale and with significantly shorter lockup durations. We also show that abnormal returns around the lockup expiration dates are associated solely with Venture-Capital (VC)-backed IPOs.