Coopetitive dynamics and inter-organizational knowledge flow among venture capital firms

Kybernetes ◽  
2019 ◽  
Vol 49 (1) ◽  
pp. 47-72
Author(s):  
Stavros Sindakis ◽  
Sakshi Aggarwal ◽  
Charles Chen
Keyword(s):  
Knowledge Transfer ◽  
Venture Capital ◽  
New Ventures ◽  
Theoretical Work ◽  
Knowledge Flows ◽  
Venture Capitalists ◽  
Content Type ◽  
Firm Knowledge ◽  
New Business ◽  
Start Ups

Purpose The purpose of this paper is to analyze important theoretical work conducted in the research streams of coopetition dynamics and knowledge flows in the area of start-up entrepreneurship. The authors see in practice that venture capital (VC) firms are a highly essential component of the environment that gives birth to entrepreneurial ventures, helping them to grow profoundly. Interorganizational collaborations facilitate VC firms to be a beneficial partner because except for providing funding, they also possess knowledge-based resources to support the new business. Design/methodology/approach A systematic review of the literature was conducted, using relevant keywords and academic databases. Then, the backward search was implemented to examine the references of the selected papers, and finally, the forward search to explore the citations of the selected papers. After the selection of papers, they were classified according to their content. A thorough search of the extant literature was done in Scopus and Google Scholar using a combination of keywords such as coopetition, knowledge flows, VC firms, interorganizational and inter-firm knowledge dynamics. Findings This paper highlights the capability of venture capitalists and provides insights as to how knowledge transfer and sharing between VC firms affect new venture’s growth and prosperity. Research limitations/implications This paper attempts to provide new perspectives and explore the significance of interorganizational coopetition and knowledge transfer and sharing between VC firms when they take part in the support and development of new ventures (e.g. start-ups). A theoretical model is proposed via the coopetition dynamics and inter-firm knowledge flows in the VC sector framework. Originality/value This paper adds to the existing theoretical knowledge and underlines the topic of interorganizational coopetition and knowledge flows between VC firms. This is the first attempt, on the one hand, to link inter-firm knowledge flows and new venture development, while on the other to examine the dynamics between VC firms and the collective contribution for the growth of start-ups.

scholarly journals Influence of Venture Capital and Knowledge Transfer on Innovation Performance in the Big Data Environment

2019 ◽  
Vol 12 (4) ◽  
pp. 188 ◽  
Author(s):  
Chuanrong Wu ◽  
Xiaoming Yang ◽  
Veronika Lee ◽  
Mark E. McMurtrey
Keyword(s):  
Big Data ◽  
Knowledge Transfer ◽  
Venture Capital ◽  
New Product ◽  
User Preferences ◽  
Innovation Performance ◽  
Venture Capitalists ◽  
New Knowledge ◽  
Data Environment ◽  
Start Ups

Technological innovation requires large investments. Venture capital (VC) is a prominent financial source for innovative start-ups. A venture capitalist will inevitably transfer knowledge to facilitate the innovation of a firm while monitoring and advising its portfolio companies. Only when a firm has its own valuable new knowledge and high growth potential would venture capitalists select it. At the same time, big data knowledge, such as customer demands and user preferences, is also important for the new product development of a firm in the big data environment. Therefore, private knowledge transferred from venture capitalists, new knowledge developed independently by a firm itself, and big data knowledge are the three main types of knowledge for venture-backed firms in the big data environment. To find the influences of VC and knowledge transfer on the innovative performance of venture-backed firms, a model of maximizing the present value of the expected profit of new product innovation performance of a venture-backed firm in the big data environment is presented. The model can help venture capitalists to determine the scale of investment and the optimal exit time and predict the internal rate of return (IRR). This model can also help innovative start-ups to illustrate the value and prospects of a project to attract investment in their business prospectus.

Value of initial relationships in new business start-ups

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jose Novais Santos ◽  
Joao Mota
Keyword(s):  
New Ventures ◽  
Customer Relationships ◽  
Value Functions ◽  
Business Relationships ◽  
Business Network ◽  
Content Type ◽  
Customer Base ◽  
New Business ◽  
Start Ups ◽  
Over Time

Purpose Several studies have focussed on new ventures and the development of their first business relationships. However, the understanding of the value functions and involvement in those relationships remain inadequate. The purpose of this paper is to explore the relating process of a new venture by combining the value function framework and the notion of the degrees of involvement in business relationships. Design/methodology/approach The authors rely on two exploratory longitudinal case studies that focus on two start-ups. In both cases, the evolution of initial relationships with suppliers and customers over a period of time are studied. Findings The process of relating can occur through a diversity of business relationships manifested in both their value functions and their degree of involvement. The combination of value functions is not stable over time nor is the degree of involvement in business relationships. Moreover, specific interdependencies emerge between the value functions in the customer base and the supplier base of the new ventures over time. Originality/value This paper is among the few that explore the emergence of new ventures by considering both suppliers and customer relationships. From a business network perspective, the paper also shows that combining value functions and degrees of involvement provides a better understanding of the role of relationship diversity in the process of becoming a node in the business network.

VENTURE CAPITALISTS’ COLLECTIVE BELIEFS ON NEW BUSINESS VENTURE INVESTMENTS

1994 ◽  
Vol 02 (02) ◽  
pp. 629-667 ◽  
Author(s):  
HERNAN RIQUELME
Keyword(s):  
Venture Capital ◽  
New Ventures ◽  
Decision Rules ◽  
Evaluation Criteria ◽  
Situational Factor ◽  
Venture Capitalists ◽  
New Business ◽  
Attribution Of Blame ◽  
Multi Method Approach ◽  
The Uk

A multi-method approach (investment case analysis, administrative records, published interviews, questionnaire, and personal interviews) was conducted in order to deal with the widest possible range of aspects connected with venture capitalists’ investments in new businesses. Our study identified 73 decision rules or heuristics associated with such investments and we examined the extent to which these rules were shared by the UK venture capital community. We proposed to find out the reasons for business problems/failures and whether venture capitalists’ attribution of blame is biased. We explained what social functions this attribution serves and what consequences it entails for the venture capitalist, the entrepreneur, and the providers of funds to venture capital firms. Our decision rules demonstrate that not only evaluation criteria are important to understanding success of new ventures but also other heuristics associated with the deal structure, and two basic social processes, namely, hands-on management and networks. This very much reflects the widespread belief among venture capitalists that “it is not just a matter of picking up the winners”. This research has made explicit the venture capitalists’ “theory”of new business failures and illustrates their attribution bias towards the managerial team. This attribution of blame has serious consequences for the managerial team and the venture capitalists themselves as they will try to alter the managerial team rather than any other situational factor, e.g. market, product.

Do new ventures explore, exploit or both? A case-based analysis of six innovative Italian start-ups

2019 ◽  
Vol 25 (7) ◽  
pp. 1515-1536 ◽  
Author(s):  
Pierluigi Rippa ◽  
Cristina Ponsiglione ◽  
Anca Bocanet ◽  
Guido Capaldo ◽  
Giuseppe Zollo
Keyword(s):  
New Ventures ◽  
New Venture ◽  
Venture Capitalists ◽  
Exploration And Exploitation ◽  
Temporal Separation ◽  
Trade Off ◽  
Content Type ◽  
Start Ups ◽  
Exploration Exploitation ◽  
The Way

Purpose The purpose of this paper is to contribute to the debate on exploration–exploitation trade-off in the context of new ventures creation, where, particularly at the empirical level, there is a limited understanding of whether and how this trade-off is achieved and how start-ups performances are affected by the way in which they face the exploration–exploitation dilemma. Design/methodology/approach A qualitative case study approach has been adopted as a methodology to conduct the research. Six Italian innovative start-ups were selected and analyzed through in-depth interviews with founders and data collection to understand whether and how start-ups adopt exploration and exploitation solutions to face critical events in their business lives. Findings The most evident result of this study is that start-ups adopt more frequently a temporal separation of exploration and exploitation activities as the preferred mode for balancing learning and innovation tension. They do not seem to exhibit a defined or a common path in the way they realize the temporal separation between exploration and exploitation. Instead, they mostly oscillate. The ambidextrous solution is selected in only a few cases and not consecutively. The pre-entry knowledge profile seems to influence the choice of start-ups at the beginning of their lives. Practical implications This research has implications for the whole start-up’s ecosystem, comprising incubators/accelerators, advisors, intermediaries, venture capitalists, new venture founders and policymakers. For example, by knowing the typology of knowledge and competence gaps start-ups usually aim to fill when they face particular events, intermediaries (such as incubators) could better plan initiatives and strategies supporting new ventures in the process of growth and stabilization. Furthermore, the venture capitalists can benefit from this research, by planning specific interventions for each critical event based on specific resources and competencies gaps and guiding for more promising start-ups. Originality/value This paper presents a novel application of entrepreneurial learning approach in the context of new venture creation. To reach this aim, a classification of exploration/exploitation solutions has been developed.

Inter-organizational knowledge transfer through corporate venture capital investment

2015 ◽  
Vol 53 (7) ◽  
pp. 1601-1618 ◽  
Author(s):  
Sang M. Lee ◽  
Taewan Kim ◽  
Seung Hoon Jang
Keyword(s):  
Knowledge Transfer ◽  
Venture Capital ◽  
Longitudinal Design ◽  
Organizational Knowledge ◽  
Corporate Venture Capital ◽  
Content Type ◽  
Knowledge Diversity ◽  
Corporate Venture ◽  
Level Of Knowledge ◽  
Start Ups

Purpose – The purpose of this paper is to investigate the relationship between corporate venture capital (CVC) investment and the level of knowledge transferred from start-ups to corporate investors. It also delineates the conditions under which CVC investment facilitates the knowledge transfer. Design/methodology/approach – A longitudinal design is used to examine annual snapshots of CVC investment and patent citing activities for the period from 1995 to 2005. This paper uses a negative binomial Poisson regression model to test proposed research hypotheses. Findings – The authors found that that there is an inverted U-shaped relationship between the number of CVC investments and the level of knowledge transferred from the start-up. The results of this study also found that knowledge diversity of the investing firm moderates the inverted U-shaped relationship. Originality/value – This research contributes to the search literature by conceptualizing CVC investment as a distant search process for sourcing external knowledge from start-ups. By arguing theoretically and demonstrating empirically the effects of tie strength of CVC structure and technological knowledge diversity on organizational knowledge transfer, this current study extends the previous understanding and applicability of social relations and technological diversity to understand CVC activity.

Knowledge transfer roles of subsidiaries in MNCs’ networks

2019 ◽  
Vol 29 (4) ◽  
pp. 329-346 ◽  
Author(s):  
Cigdem Baskici
Keyword(s):  
Knowledge Transfer ◽  
Single Case ◽  
Research Question ◽  
Hierarchical Structures ◽  
Knowledge Flows ◽  
Consumer Electronics ◽  
Knowledge Network ◽  
Content Type ◽  
Knowledge Based

Purpose Although there have been a considerable number of studies regarding subsidiary role typology in multinationals’ management literature, there appear to be few studies that consider knowledge-based role typology from the network-based perspective. The purpose of this study is to fill this gap and extend the study of Gupta and Govindarajan (1991). Thus, the study focuses on answering the following research question: Do subsidiaries have different roles in terms of knowledge flows within a multinational company (MNC)? Design/methodology/approach This empirical study has been carried out as an explorative single case study. An MNC with 15 foreign subsidiaries headquartered in Turkey, which operated in the manufacturing of household appliances and consumer electronics, has been selected as the case. Knowledge transfer is analyzed in this MNC from the network perspective. Findings Four role typologies are detected for subsidiaries of the MNC: collector transmitter, collector diffuser, converter transmitter and converter diffuser. Research limitations/implications Findings of this study are specific to this case. Testing the findings in a sample consisting of subsidiaries of MNCs producing transnational products may contribute to the generalizability of these roles. Practical implications This study offers potentially important findings for MNC managers to use. First, in this study, knowledge flows' route could be defined within MNCs’ dual network. Second, role typologies could inform MNC managers to design their MNCs’ knowledge network. Originality/value The suggested typologies are expected to more accurately define the roles of subsidiaries within contemporary MNCs which are accepted to be transformed from hierarchical structures to network-based organizations.

What's New in the Launching of Start-ups?

2009 ◽  
Vol 23 (2) ◽  
pp. 133-137 ◽  
Author(s):  
Diego Matricano
Keyword(s):  
New Ventures ◽  
Business Environment ◽  
Economic Role ◽  
Globalized Economy ◽  
New Business ◽  
New Thinking ◽  
Experimental Laboratory ◽  
Start Ups ◽  
Research Centres

The exploitation of knowledge and experience is increasingly important to companies operating in the globalized economy, faced with intense competition and striving to make headway in difficult markets. If such exploitation is important for existing companies, able to develop their own knowledge from previous experience, it is critical for new ventures that have no direct real-world experience on which to draw. Would-be entrepreneurs now operate in a very different business environment from that of their predecessors and they need new forms of entrepreneurship education and new methods of pre-launch trial and analysis for start-ups. The transition from ‘nature’ to ‘nurture’ in the approach to and perception of entrepreneurship, coupled with the increasingly engaged economic role of higher education institutions and research centres can be manipulated effectively to improve the prospects for success of high-expectation entrepreneurs. This article demonstrates how Curley and Formica's model of the experimental laboratory for would-be entrepreneurs responds to the new business environment and the new thinking.

Artificial intelligence (AI) for tourism: an European-based study on successful AI tourism start-ups

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Raffaele Filieri ◽  
Elettra D’Amico ◽  
Alessandro Destefanis ◽  
Emilio Paolucci ◽  
Elisabetta Raguseo
Keyword(s):  
Artificial Intelligence ◽  
Language Processing ◽  
Radical Change ◽  
Tourism Industry ◽  
Venture Capitalists ◽  
Content Type ◽  
Travel And Tourism ◽  
Study Experience ◽  
And Mathematics ◽  
Start Ups

Purpose The travel and tourism industry (TTI) could benefit the most from artificial intelligence (AI), which could reshape this industry. This study aims to explore the characteristics of tourism AI start-ups, the AI technological domains financed by Venture Capitalists (VCs), and the phases of the supply chain where the AI domains are in high demand. Design/methodology/approach This study developed a database of the European AI start-ups operating in the TTI from the Crunchbase database (2005–2020). The authors used start-ups as the unit of analysis as they often foster radical change. The authors complemented quantitative and qualitative methods. Findings AI start-ups have been mainly created by male Science, Technology, Engineering and Mathematics graduates between 2015 and 2017. The number of founders and previous study experience in non-start-up companies was positively related to securing a higher amount of funding. European AI start-ups are concentrated in the capital town of major tourism destinations (France, UK and Spain). The AI technological domains that received more funding from VCs were Learning, Communication and Services (i.e. big data, machine learning and natural language processing), indicating a strong interest in AI solutions enabling marketing automation, segmentation and customisation. Furthermore, VC-backed AI solutions focus on the pre-trip and post-trip. Originality/value To the best of the authors’ knowledge, this is the first study focussing on digital entrepreneurship, specifically VC-backed AI start-ups operating in the TTI. The authors apply, for the first time, a mixed-method approach in the study of tourism entrepreneurship.

scholarly journals Innovative start-ups and young entrepreneurs: Definition of venture capital and findings from Switzerland

2017 ◽  
Vol 7 (1) ◽  
pp. 75-81
Author(s):  
Simon Zaby
Keyword(s):  
Venture Capital ◽  
Success Factors ◽  
Total Sample ◽  
Venture Capitalists ◽  
Flow Of Funds ◽  
Start Up ◽  
Capital Financing ◽  
Proper Definition ◽  
Definition Of ◽  
Start Ups

This paper aims to investigate success factors of innovative start-up firms from the perspective of young start-up managers. Which key factors did they experience before and since the foundation of their company? The experience from the quite young Swiss start-up scene pro-vides important insights to entrepreneurs and policy-makers in emerging countries that cur-rently face the necessity of building up a start-up environment. One part of the data has been collected by the author, the other part originates from the Swiss Venture Capital Database (total sample size: 306). The results show a significant role of venture capital financing for the success of innovative start-ups. Interestingly, this is to some extent because the start-ups see various additional benefits from venture capitalists involved in their firm. Thus, the findings shed new light on a proper definition of venture capital that should not solely focus on the flow of funds.

scholarly journals The early growth of start-ups: innovation matters. Evidence from Italy

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Raffaele Fiorentino ◽  
Sergio Longobardi ◽  
Alessandro Scaletti
Keyword(s):  
Propensity Score ◽  
Propensity Score Matching ◽  
Firm Growth ◽  
Ad Hoc ◽  
Early Stage ◽  
New Ventures ◽  
Objective Measure ◽  
Content Type ◽  
Start Up ◽  
Start Ups

PurposeDespite the relevance of innovation in entrepreneurship literature, empirical research on the innovation-performance relationship in start-ups is underdeveloped and shows controversial results. To bridge this gap, the aim of this paper is to investigate the role of innovativeness on new venture performance in the early stage of the life cycle.Design/methodology/approachRegression modelling and propensity score matching are used to reveal systematic differences in growth between innovative start-ups (ISUPs) and non-innovative start-ups. We use an ad hoc dataset obtained through merging the financial database AIDA with data from administrative sources (Italian Chambers of Commerce and the Italian Ministry for Economic Development).FindingsThe results show that differences in growth can be explained by the different levels of innovativeness in new ventures. Moreover, unlike in prior studies, the innovation inputs matter more than innovation outputs. Indeed, the results support the idea that innovation policies can contribute to maximising the potential of start-ups.Practical implicationsThe findings provide suggestions for policy makers and entrepreneurs to help firms configure ex ante appropriate actions to support the growth of new ventures in the start-up stage.Originality/valueThis study is the first to use the new objective measure of start-up innovation, available from the Italian LD 221 register. Second, different types of innovation are investigated as antecedents of firm growth. Third, we employ propensity score matching, which favours revealing systematic differences in growth between ISUPs and non-innovative start-ups. Fourth, the results of our study are the first to offer evidence on the effectiveness of the new Italian sustaining ISUPs policy.

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