Pub Date : 2021-04-03DOI: 10.1080/13691066.2021.1882722
Jay J. Janney, Naga Lakshmi Damaraju, Gregory G. Dess
ABSTRACT Corporate venture capital (CVC) firms face considerable uncertainty while investing time, capital, and other resources in their portfolio firms, typically entrepreneurial ventures. The absence of unambiguous measures of performance about the portfolio firm’s prospects for success and longevity typically is at the root of such uncertainty. Prior research, based on the literature on inter-organizational endorsements grounded in the institutional theory, focused on returns to the portfolio firms under such conditions of uncertainty. We, on the other hand, test the hypotheses that the “prominence” of a CVC firm and the presence of a “prior investment” in the portfolio firm serve as endorsements and the acquiring firms, as endorsers, earn positive financial returns. Results from a sample of biotechnology acquisitions, using an event study methodology for capturing the cumulative abnormal returns (CARs) to acquisition announcements and ordinary least squares regressions (OLS) to study the determinants of the CARs, support the hypotheses.
{"title":"The role of corporate venture capital on returns to acquiring firms: evidence from the biotechnology industry","authors":"Jay J. Janney, Naga Lakshmi Damaraju, Gregory G. Dess","doi":"10.1080/13691066.2021.1882722","DOIUrl":"https://doi.org/10.1080/13691066.2021.1882722","url":null,"abstract":"ABSTRACT Corporate venture capital (CVC) firms face considerable uncertainty while investing time, capital, and other resources in their portfolio firms, typically entrepreneurial ventures. The absence of unambiguous measures of performance about the portfolio firm’s prospects for success and longevity typically is at the root of such uncertainty. Prior research, based on the literature on inter-organizational endorsements grounded in the institutional theory, focused on returns to the portfolio firms under such conditions of uncertainty. We, on the other hand, test the hypotheses that the “prominence” of a CVC firm and the presence of a “prior investment” in the portfolio firm serve as endorsements and the acquiring firms, as endorsers, earn positive financial returns. Results from a sample of biotechnology acquisitions, using an event study methodology for capturing the cumulative abnormal returns (CARs) to acquisition announcements and ordinary least squares regressions (OLS) to study the determinants of the CARs, support the hypotheses.","PeriodicalId":46643,"journal":{"name":"Venture Capital","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2021-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75032614","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-04-03DOI: 10.1080/13691066.2021.1894749
Hyunsung D. Kang, Vikram Nanda, H. Park
ABSTRACT Using a framework combining the real option perspective and appropriation concerns raised in the entrepreneurial finance literature, we find that technology spillovers and capital gains created by corporate venture capital (CVC) investments are positively related with each other in the biopharmaceutical industry. However, this positive relationship is significantly decreased or becomes negative when CVC investments are made with solely financial objectives or in early-stage startups. This study provides evidence that the nature of the relationship between technology spillovers and capital gains that constitute the corporate investors’ total returns created by CVC investments.
{"title":"Technology spillovers and capital gains in corporate venture capital investments: evidence from the biopharmaceutical industry","authors":"Hyunsung D. Kang, Vikram Nanda, H. Park","doi":"10.1080/13691066.2021.1894749","DOIUrl":"https://doi.org/10.1080/13691066.2021.1894749","url":null,"abstract":"ABSTRACT Using a framework combining the real option perspective and appropriation concerns raised in the entrepreneurial finance literature, we find that technology spillovers and capital gains created by corporate venture capital (CVC) investments are positively related with each other in the biopharmaceutical industry. However, this positive relationship is significantly decreased or becomes negative when CVC investments are made with solely financial objectives or in early-stage startups. This study provides evidence that the nature of the relationship between technology spillovers and capital gains that constitute the corporate investors’ total returns created by CVC investments.","PeriodicalId":46643,"journal":{"name":"Venture Capital","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2021-04-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"75349010","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-15DOI: 10.1080/13691066.2022.2128933
Hossein Dastkhan
ABSTRACT Valuation of new technology-based firms and startups is one of the main concerns of these Firms. The need to expand financial resources and evaluate the potential income of these firms increases the importance of the valuation of these firms for entrepreneurs and investors. In this paper, we represent a comprehensive framework to assess the strengths and the weaknesses of the valuation methods in NTBFs with a focus on the factors in the emerging markets. For this purpose, different valuation methods and their related criteria for NTBFs are extracted and evaluated by experts in terms of applicability and Sufficiency. We categorized the existing valuation methods to 4 different groups: “asset valuation methods”, “intellectual property valuation methods”, “technology valuation methods”, and “startups valuation methods”. Then, the importance of each criterion is determined using the analytical hierarchical process method. Finally, we used fuzzy TOPSIS to prioritize each category of valuation methods and identify their strengths and weaknesses. The results indicate which sets of valuation methods are the more preferred method for Iranian entrepreneurs and investors to evaluate different kinds of NTBFs. Besides, the results of the model on different criteria proposed different suggestions to improve the existing valuation methods.
{"title":"A framework to assess the valuation techniques for new technology-based firms: a case in an emerging market","authors":"Hossein Dastkhan","doi":"10.1080/13691066.2022.2128933","DOIUrl":"https://doi.org/10.1080/13691066.2022.2128933","url":null,"abstract":"ABSTRACT Valuation of new technology-based firms and startups is one of the main concerns of these Firms. The need to expand financial resources and evaluate the potential income of these firms increases the importance of the valuation of these firms for entrepreneurs and investors. In this paper, we represent a comprehensive framework to assess the strengths and the weaknesses of the valuation methods in NTBFs with a focus on the factors in the emerging markets. For this purpose, different valuation methods and their related criteria for NTBFs are extracted and evaluated by experts in terms of applicability and Sufficiency. We categorized the existing valuation methods to 4 different groups: “asset valuation methods”, “intellectual property valuation methods”, “technology valuation methods”, and “startups valuation methods”. Then, the importance of each criterion is determined using the analytical hierarchical process method. Finally, we used fuzzy TOPSIS to prioritize each category of valuation methods and identify their strengths and weaknesses. The results indicate which sets of valuation methods are the more preferred method for Iranian entrepreneurs and investors to evaluate different kinds of NTBFs. Besides, the results of the model on different criteria proposed different suggestions to improve the existing valuation methods.","PeriodicalId":46643,"journal":{"name":"Venture Capital","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2021-01-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78725858","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-02DOI: 10.1080/13691066.2020.1824603
C. Granz, Eva Lutz, Marisa Henn
ABSTRACT In this paper, we draw upon resource dependence theory to investigate the impact of different types of value-added services on entrepreneurs’ venture capitalist selection. We use a mixed method research design based on a choice experiment with 3,172 decisions of 122 entrepreneurs in Germany, Austria, and Switzerland and semi-structured interviews with the participating entrepreneurs. Our results indicate that entrepreneurs focus on selecting venture capitalists that act as scouts rather than as coaches. In particular, scouting activities such as the extension of the operational network and exit support are important for entrepreneurs in their selection process, whereas coaching activities such as strategic advice and help in internal business development are less relevant. Furthermore, entrepreneurs perceive value-added services as an active resource management tool to take advantage of interdependencies between their own and the venture capitalist’s resources, rather than as primarily filling their own resource gaps.
{"title":"Scout or coach? Value-added services as selection criteria in entrepreneurs’ venture capitalist selection","authors":"C. Granz, Eva Lutz, Marisa Henn","doi":"10.1080/13691066.2020.1824603","DOIUrl":"https://doi.org/10.1080/13691066.2020.1824603","url":null,"abstract":"ABSTRACT In this paper, we draw upon resource dependence theory to investigate the impact of different types of value-added services on entrepreneurs’ venture capitalist selection. We use a mixed method research design based on a choice experiment with 3,172 decisions of 122 entrepreneurs in Germany, Austria, and Switzerland and semi-structured interviews with the participating entrepreneurs. Our results indicate that entrepreneurs focus on selecting venture capitalists that act as scouts rather than as coaches. In particular, scouting activities such as the extension of the operational network and exit support are important for entrepreneurs in their selection process, whereas coaching activities such as strategic advice and help in internal business development are less relevant. Furthermore, entrepreneurs perceive value-added services as an active resource management tool to take advantage of interdependencies between their own and the venture capitalist’s resources, rather than as primarily filling their own resource gaps.","PeriodicalId":46643,"journal":{"name":"Venture Capital","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2021-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"77145284","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-02DOI: 10.1080/13691066.2021.1886660
Vincenzo Capizzi, C. Bellavitis, S. Johan
{"title":"The evolution of Venture Capital: from the early days to recent successes","authors":"Vincenzo Capizzi, C. Bellavitis, S. Johan","doi":"10.1080/13691066.2021.1886660","DOIUrl":"https://doi.org/10.1080/13691066.2021.1886660","url":null,"abstract":"","PeriodicalId":46643,"journal":{"name":"Venture Capital","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2021-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87841819","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2021-01-02DOI: 10.1080/13691066.2021.1873210
G. Fels, M. Kronberger, T. Gutmann
ABSTRACT What are the underlying performance drivers of corporate venture capital (CVC)? This paper provides a holistic overview and a synthesis of past studies of CVC performance for both scholars and practitioners compiling relevant empirical research on factors influencing the performance of CVC. Based on a sample of 36 publications published between 1986 and 2018, we illustrate that the performance of CVC is influenced by a complex setting due to the heterogeneity of the stakeholders involved. Our study identifies four factors directly related to the performance of CVC – portfolio composition, corporate knowledge, organizational relationship, and managerial influence and focus – and provides a comprehensive review and systematic assessment of the theoretical considerations regarding these factors. Beyond that, it reveals that current research is still limited in terms of the number of published articles about the questions at hand, and only scratches at the surface of the determinants of CVC performance. Concluding, we provide guidance for future research on CVC performance along the four identified factors.
{"title":"Revealing the underlying drivers of CVC performance— a literature review and research agenda","authors":"G. Fels, M. Kronberger, T. Gutmann","doi":"10.1080/13691066.2021.1873210","DOIUrl":"https://doi.org/10.1080/13691066.2021.1873210","url":null,"abstract":"ABSTRACT What are the underlying performance drivers of corporate venture capital (CVC)? This paper provides a holistic overview and a synthesis of past studies of CVC performance for both scholars and practitioners compiling relevant empirical research on factors influencing the performance of CVC. Based on a sample of 36 publications published between 1986 and 2018, we illustrate that the performance of CVC is influenced by a complex setting due to the heterogeneity of the stakeholders involved. Our study identifies four factors directly related to the performance of CVC – portfolio composition, corporate knowledge, organizational relationship, and managerial influence and focus – and provides a comprehensive review and systematic assessment of the theoretical considerations regarding these factors. Beyond that, it reveals that current research is still limited in terms of the number of published articles about the questions at hand, and only scratches at the surface of the determinants of CVC performance. Concluding, we provide guidance for future research on CVC performance along the four identified factors.","PeriodicalId":46643,"journal":{"name":"Venture Capital","volume":null,"pages":null},"PeriodicalIF":2.4,"publicationDate":"2021-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"78115301","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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