We examine how VC backing is associated with voluntary ESG disclosure in U.S. private firms. Using website-based disclosure for over 36,000 firms between 2013 and 2023, we find that VC-backed firms exhibit a 17% higher disclosure in late financing rounds compared to their pre-VC baseline. Relative to other private firms, VC-backed firms start from lower disclosure levels but converge gradually, surpassing non-VC-backed firms by approximately 11% in late financing rounds. We then examine whether this in crease reflects disclosure adjustments in anticipation of ownership transactions (IPOs and acquisitions). Event-time analyses show stable disclosure in pre-transaction years for VC-backed firms. By contrast, non-VC-backed firms exhibit significant ESG disclosure adjustments before ownership transactions, particularly in IPO settings, where they in crease ESG disclosure by 39% in the year before going public. Consequently, our results suggest that VC backing is associated with a gradual disclosure development over the financing cycle, contrasting with strategic pre-IPO adjustments among non-VC-backed firms. Overall, these patterns suggest that ESG disclosure in private firms reflects differences in disclosure incentives across financing environments and transaction-related market pressures.
