Lifespans of corporate and independent venture capitalists: a systematic review

Abstract

ABSTRACT Corporate venture capitalists (CVCs) have shorter lifespans than independent venture capitalists (IVCs), but the reasons for this are not well understood. This paper identifies influencing factors affecting lifespans of CVCs and IVCs. Based on a sample of 190 articles, this systematic review identifies 41 factors that influence VC performance across four dimensions: decisions about strategies, the exploitation of venture capital resources and characteristics, active involvement in the venture capital environment, and limited underlying room for maneuvering. These dimensions show differences in the decision-making of IVCs and CVCs and impact lifespan. CVCs yield greater financial performance than IVCs. However, our results suggest that five CVC-specific factors are significant influencing factors which can explain lifespan differences: investment objectives, organizational autonomy and structure, interorganizational relationships, commitment of corporate parent, and parent company size. Overall, the longevity of CVCs is largely determined by a number of internal decisions made between the CVC and its parent company. Limiting the influence of corporate parents is suggested to enhance the success and lifespan of CVCs.