Corporate Venture Capital Diversification, Parent Company Value Spillovers, and Value Creation of Start-ups

2021 ◽  
Author(s):  
Lei Wang ◽  
Ye Yang ◽  
Yunbi An
Keyword(s):  
Venture Capital ◽  
Value Creation ◽  
Parent Company ◽  
Corporate Venture Capital ◽  
Company Value ◽  
Corporate Venture ◽  
Start Ups

scholarly journals The effects of corporate venture capital on value creation and innovation of European public owned firms

2021 ◽  
Vol 18 (4) ◽  
pp. 117-133
Author(s):  
Giacomo Bider ◽  
Gimede Gigante
Keyword(s):  
Venture Capital ◽  
Value Creation ◽  
Firm Value ◽  
Corporate Venture Capital ◽  
Listed Firms ◽  
The North ◽  
European Public ◽  
Negative Effect ◽  
Corporate Venture ◽  
And Performance

The practice of corporate venture capital (CVC) has been widely adopted by corporations that invest in highly disruptive start-ups with the aim of fueling innovation and gain strategic advantages. Even if a wide consensus exists on the strategic benefits and performance of CVC investors in the North American venture capital industry, scarce information is available on the European CVC ecosystem. Therefore, the scope of this research is to investigate whether CVC activity, measured as the number of investments, deal size, and the number of realized exits is beneficial for value creation and innovation for European listed companies. Using a panel of CVC investors linked to European listed firms, it is found evidence that CVC activity creates firm value in the period under consideration (2008–2019), confirming North American’s past evidence. Surprisingly, exits convey a negative effect on firm value, suggesting that CVC performance may not be satisfactory enough. Moreover, when considering innovation, evidence is presented that investing in rounds with a higher deal size positively affects investor’s patenting levels, indicating that the later the start-up’s stage in its life cycle, the higher the possibility for the CVC investor to effectively absorb its technology. The relationship is true also for lagged CVC activity, confirming deferred effects on innovation demonstrated on US companies. The findings shed light on the European CVC ecosystem and give room for additional research on CVC investors’ exit performance and co-investors’ benefits on patenting levels

scholarly journals Corporate venture capital: global trends and evaluation of russia’s prospects

2019 ◽  
Vol 5 (2) ◽  
pp. 114-128
Author(s):  
О. A. Yeremchenko
Keyword(s):  
Venture Capital ◽  
Mobile Communications ◽  
Early Stage ◽  
Corporate Venture Capital ◽  
Global Trends ◽  
Second Stage ◽  
Start Up ◽  
Corporate Venture ◽  
Total Investment ◽  
Start Ups

The article analyzes the global trends of corporate venture financing (CFE) as a whole and for individual sectors of the economy. It is shown that the industries in which KFW is most actively and dynamically used are the Internet, mobile communications and healthcare. The maximum attention of corporate venture funds is attracted by start-ups in the early stages of raising capital, more than half of all venture capital deals are made at the Seed / Angel (seed stage) and Early Stage stages (the second stage of attracting start-up capital). The most common exit from venture capital deals during 2014–2018. For most industries, the redemption share of the FAC is a management startup (Management Buyout). It was concluded that Russia is poorly included in the use of corporate venture capital as a tool for building technological capacity: the country’s share in the number of corporate venture capital transactions in 2018 is 1.9% of the global total, and the total investment of Russian enterprises estimated at only 0.45% of the global total. It was suggested that it would be expedient to increase the activity of Russian corporations in the field of creating and using the capabilities of the FSC.

A Start-Up’s R&D Stages and the Evolution of Financing Sources: Evidence from the Biotechnology Industry

2018 ◽  
Vol 8 (3) ◽  
Author(s):  
Hyunsung D Kang
Keyword(s):  
Life Cycle ◽  
Venture Capital ◽  
Biotechnology Industry ◽  
Phase Iii ◽  
Corporate Venture Capital ◽  
Entrepreneurial Finance ◽  
Life Cycle Theory ◽  
Start Up ◽  
Corporate Venture ◽  
Start Ups

AbstractThe co-existence of angel, independent venture capital (IVC), and corporate venture capital (CVC) in the entrepreneurial finance market raises a natural question of why a start-up finances its projects from one source over another. This question becomes more complicated to address because a start-up grows or declines dynamically. Using a life cycle theory of entrepreneurial finance, which suggests that a start-up uses several financing sources as it reaches certain thresholds in its life cycle accordingly, I explore this selection issue with my dataset on 113 biopharmaceutical start-ups. I find that these start-ups tend to finance their projects mostly from solely IVCs or CVCs rather than angels and syndicated investors combining IVCs and CVCs when they have more preclinical and phase I products in their R&D pipelines; and from CVCs or syndicated investors rather than angels and IVCs when they do more phase II and phase III products.

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.

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