This paper investigates the effects of pre-IPO banking relationships on a firm's IPO. Using a new and unique data set, which compares the firm's pre-IPO banking relationships to the underwriters managing the firm's new issue, I test whether banking relationships established before the firm's IPO ameliorate asymmetric information problems behind high IPO underpricing. The results show that firms with a pre-IPO banking relationship with a prospective underwriter face about 17% lower underpricing than firms without such banking relationships. These results are robust to controlling for the firm's endogenous selection of the pre-IPO banking institution. * Schenone is with the Finance Department, University of Minnesota. I am grateful to my advisors, Kathleen Hagerty, Mitchell Petersen, and William Rogerson for their advice, comments and suggestions. I am also indebted to Luca Benzoni, Federico Ciliberto, Richard Green (the editor), Andy Winton, and to an anonymous referee for insightful comments and suggestions. I thank