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When does corporate venture capital add value for new ventures?

Authors

  • Haemin Dennis Park,

    Corresponding author
    1. Institute of Entrepreneurship and Innovation, Henry W. Bloch School of Management, University of Missouri-Kansas City, Kansas City, Missouri, U.S.A.
    • Institute of Entrepreneurship and Innovation Henry W. Bloch School of Management, University of Missouri-Kansas City, Kansas City, MO 64110, U.S.A.
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  • H. Kevin Steensma

    1. Michael G. Foster School of Business, University of Washington, Seattle, Washington, U.S.A.
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Abstract

New ventures face a trade-off when considering corporate venture capital (CVC) funding. Corporate investors can provide complementary assets that enhance the commercialization of new venture technologies. However, tight links with a particular corporate investor has drawbacks and may constrain new ventures from accessing complementary assets from diverse sources in an open market. Taking this trade-off into account, we explore conditions under which CVC funding is beneficial to new ventures. Using a sample of computer, semiconductor, and wireless ventures, we find that CVC funding is particularly beneficial for new ventures when they require specialized complementary assets or operate in uncertain environments. Copyright © 2011 John Wiley & Sons, Ltd.

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