This dissertation examines the formation and outcomes of interorganizational partnerships between industry incumbents and new ventures. New ventures are often a powerful competitive force threatening established firms, but incumbent firms can also benefit from collaborating with them and acquiring external knowledge. Although there has been significant research on the topic, relatively little is known about relational factors that influence who partners with whom and how. Also, strategic benefits of partnering with new ventures for incumbent firm's learning have not been scrutinized; in particular, whether making such formal arrangements is the best way for incumbents to attain knowledge from new ventures, and whether there are any alternative learning mechanisms available have not been examined. I address these issues in the context of corporate venture capital (CVC) investments, typically the first relationships formed between new ventures and incumbent firms. First, I examined how new ventures' social ties with potential corporate investors based on founders' employment or prior co-investments of the lead venture capital firm influence the formation of CVC investment deals. Second, I examined the relative effects of multiple mechanisms including CVC investments on incumbent firm learning from new ventures. I find that 1) the formation of investment relationships between new ventures and incumbents is a joint function of social ties between them, an incumbent firm's integrity regarding the intellectual property of others, and technological links between them; 2) CVC investments have little independent effect on incumbent firm learning from new ventures when alternative knowledge transfer mechanisms such as hiring inventors from new ventures, prior knowledge spillover links and outbound inventor mobility are simultaneously accounted for.

In this paper, we focus on the potential innovative benefits to corporate venture capital (CVC), i.e. equity investments in entrepreneurial ventures by incumbent firms. We propose that corporate venture capital programs may be instrumental in harvesting innovations from entrepreneurial ventures and thus an important part of a firm's overall innovation strategy. We hypothesize that these programs are especially effective in weak intellectual property (IP) regimes and when the firm has sufficient absorptive capacity. We analyze a large panel of public firms over a 20-year period and find that increases in corporate venture capital investments are associated with subsequent increases in firm patenting.

From nineteenth-century whaling to a multitude of firms pursuing entrepreneurial finance today, venture finance reflects a deep-seated tradition in the deployment of risk capital in the United States. Tom Nicholas’s history of the venture capital industry offers a roller coaster ride through America’s ongoing pursuit of financial gain.

This book addresses the lack of academic and practical research into corporate venturing by examining the role of this activity as both a form of large firm-small firm collaboration and as an alternative source of equity finance for small firms. These issues are explored through surveys of independent fund managers, coporate executives and technolo

An essential guide to venture capital Studies have shown that venture capital backed entrepreneurial firms are on average significantly more successful than non-venture capital backed entrepreneurial firms in terms of innovativeness, profitability, and share price performance upon going public. Understanding the various aspects of venture capital is something anyone in any industry should be familiar with. This reliable resource provides a comprehensive view of venture capital by describing the current state of research and best practices in this arena. Issues addressed include sources of capital-such as angel investment, corporate funds, and government funds-financial contracts and monitoring, and the efficiency implications of VC investment, to name a few. Opens with a review of alternative forms of venture capital Highlights the structure of venture capital investments Examines the role venture capitalists play in adding value to their investee firms This informative guide will help you discover the true potential of venture capital.

A founder’s decision for an investor can substantially influence the new venture’s success. Two common types of venture capital (VC) are independent venture capital (IVC) and corporate venture capital (CVC). Previous research focused on the investor’s perspective and studied the distinct differences between IVC and CVC, their value-adding capabilities, and risks. In contrast, as founders’ investor options have been rising, this research focuses on the founders and studies, which of the two types they prefer and why. The author outlines which investor characteristics founders favor and quantifies the value of these VC characteristics in terms of accepted equity dilution. The results show that founder preferences for the two VC types are highly heterogeneous. The author provides recommendations for founders on how to find the right investor and outlines how investors can position themselves to attract the most promising ventures and founding teams.