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Keywords:

  • multiple agency theory;
  • corporate governance;
  • corporate venture capital;
  • innovation;
  • technology entrepreneurship

Corporate investors can provide valuable resources to their new venture investees, but their interests may conflict with those of independent venture capitalist (IVC) coinvestors. We explore how the preferences, resources, and influence of corporate investors vis-à-vis their IVC coinvestors affect their selection of investment opportunities and subsequent nurturing of new venture investees. We show that corporate investors tend to fund new ventures with greater pre-funding innovative capabilities and new ventures receiving corporate funding exhibit greater post-funding rates of innovation compared to those funded solely by IVCs, particularly when their corporate investors are highly reputable relative to their IVC coinvestors. Copyright © 2013 Strategic Management Society.