Corporate venture capital and the balance of risks and rewards for portfolio companies
This paper contributes to the literature on corporate venture capital (CVC) by examining the management of CVC investments from the perspective of the investee firm. We focus on the trade-off between social interactions and relationship safeguards and examine their effects on the twin relationship outcomes of learning benefits and risks. The model is tested using data collected from CEOs of U.S. technology-based new firms receiving CVC funding. Complementarities between the investee firm and its CVC investor are positively related to the level of social interaction and negatively related to the use of different types of relationship safeguards by the investee firm. The use of safeguards is further negatively related to both realized relationship risks and social interaction. Social interaction is positively related to realized learning benefits. These findings highlight the fine balance that the investee firm has to strike between openness and self protection in a CVC relationship. Implications for future research and current practice are discussed.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Paul Gompers & Josh Lerner, 2000.
"The Determinants of Corporate Venture Capital Success: Organizational Structure, Incentives, and Complementarities,"
in: Concentrated Corporate Ownership, pages 17-54
National Bureau of Economic Research, Inc.
- Paul A. Gompers & Josh Lerner, 1998. "The Determinants of Corporate Venture Capital Successes: Organizational Structure, Incentives, and Complementarities," NBER Working Papers 6725, National Bureau of Economic Research, Inc.
- Thomas Hellmann & Manju Puri, 2002.
"Venture Capital and the Professionalization of Start-Up Firms: Empirical Evidence,"
Journal of Finance,
American Finance Association, vol. 57(1), pages 169-197, 02.
- Hellmann, Thomas F. & Puri, Manju, 2000. "Venture Capital and the Professionalization of Start-up Firms: Empirical Evidence," Research Papers 1661, Stanford University, Graduate School of Business.
- Markku Maula & Erkko Autio & Gordon Murray, 2005. "Corporate Venture Capitalists and Independent Venture Capitalists: What do they know, Who do They Know and Should Entrepreneurs Care?," Venture Capital, Taylor & Francis Journals, vol. 7(1), pages 3-21, January.
- Kathleen R. Conner, 1995. "Obtaining Strategic Advantage from Being Imitated: When Can Encouraging "Clones" Pay?," Management Science, INFORMS, vol. 41(2), pages 209-225, February.
- Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-41, August.
- Jarillo, J. Carlos, 1989. "Entrepreneurship and growth: the strategic use of external resources," Journal of Business Venturing, Elsevier, vol. 4(2), pages 133-147, March.
- Africa Ariño & Roberto Ragozzino & Jeffrey J. Reuer, 2008. "Alliance Dynamics for Entrepreneurial Firms," Journal of Management Studies, Wiley Blackwell, vol. 45(1), pages 147-168, 01.
- Robert M. Grant & Charles Baden-Fuller, 2004. "A Knowledge Accessing Theory of Strategic Alliances," Journal of Management Studies, Wiley Blackwell, vol. 41(1), pages 61-84, 01.
- Sapienza, Harry J., 1992. "When do venture capitalists add value?," Journal of Business Venturing, Elsevier, vol. 7(1), pages 9-27, January.
- Sapienza, Harry J. & Parhankangas, Annaleena & Autio, Erkko, 2004. "Knowledge relatedness and post-spin-off growth," Journal of Business Venturing, Elsevier, vol. 19(6), pages 809-829, November.
- Thomas Keil & Erkko Autio & Gerard George, 2008. "Corporate Venture Capital, Disembodied Experimentation and Capability Development," Journal of Management Studies, Wiley Blackwell, vol. 45(8), pages 1475-1505, December.
- Henrik Bresman & Julian Birkinshaw & Robert Nobel, 1999. "Knowledge Transfer in International Acquisitions," Journal of International Business Studies, Palgrave Macmillan, vol. 30(3), pages 439-462, September.
- Hellmann, Thomas, 2002. "A theory of strategic venture investing," Journal of Financial Economics, Elsevier, vol. 64(2), pages 285-314, May.
- Steven White, 2005. "Cooperation Costs, Governance Choice and Alliance Evolution," Journal of Management Studies, Wiley Blackwell, vol. 42(7), pages 1383-1412, November.
When requesting a correction, please mention this item's handle: RePEc:eee:jbvent:v:24:y:2009:i:3:p:274-286. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.