IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

To Be Financed or Not … - The Role of Patents for Venture Capital Financing

  • Haeussler, Carolin
  • Harhoff, Dietmar
  • Mueller, Elisabeth

This paper investigates how patent applications and grants held by new ventures improve their ability to attract venture capital (VC) financing. We argue that investors are faced with considerable uncer-tainty and therefore rely on patents as signals when trying to assess the prospects of potential portfolio companies. For a sample of VC-seeking German and British biotechnology companies we have identified all patents filed at the European Patent Office (EPO). Applying hazard rate analysis, we find that in the presence of patent applications, VC financing occurs earlier. Our results also show that VCs pay attention to patent quality, financing those ventures faster which later turn out to have high-quality patents. Patent oppositions increase the likelihood of receiving VC, but ultimate grant decisions do not spur VC financing, presumably because they are anticipated. Our empirical results and interviews with VCs suggest that the process of patenting generates signals which help to overcome the liabilities of newness faced by new ventures.

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.

File URL: http://epub.ub.uni-muenchen.de/8970/1/Haeussler_et_al_VCPat_Jan2009LMU_WP_Reihe.pdf
Download Restriction: no

Paper provided by University of Munich, Munich School of Management in its series Discussion Papers in Business Administration with number 8970.

as
in new window

Length:
Date of creation: 20 Jan 2009
Date of revision:
Handle: RePEc:lmu:msmdpa:8970
Contact details of provider: Postal: Ludwigstr. 28,80539 Munich, Germany
Phone: +49-(0)89-2180-3888
Fax: +49-(0)89-344054
Web page: http://www.bwl.uni-muenchen.de

More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:lmu:msmdpa:8970. 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: (Philipp Beltz)

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.