scholarly journals The Life Cycle of Corporate Venture Capital

2015 ◽  
Author(s):  
Song Ma
Keyword(s):  
Life Cycle ◽  
Venture Capital ◽  
Corporate Venture Capital ◽  
Corporate Venture

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.

scholarly journals The Life Cycle of Corporate Venture Capital

2019 ◽  
Vol 33 (1) ◽  
pp. 358-394 ◽  
Author(s):  
Song Ma
Keyword(s):  
Life Cycle ◽  
Venture Capital ◽  
Corporate Venture Capital ◽  
Industrial Firms ◽  
Oxford University ◽  
Strategic Value ◽  
Corporate Venture ◽  
Editorial Decision ◽  
Termination Decisions ◽  
Published Paper

Abstract This paper investigates why industrial firms conduct Corporate Venture Capital (CVC) investment in entrepreneurial companies. I test alternative views on CVC by exploiting the entry, investment, and termination decisions of CVC divisions. CVC entry concentrates in firms that experience deteriorations of internal innovation. At the investment stage, CVCs select startups with a similar technological focus but that have a non-overlapping knowledge base, and they integrate technologies generated from these ventures that create strategic value. CVCs are terminated when parent firms’ innovation recovers. Overall, the strategic desire to fix innovation weaknesses after adverse shocks motivates firms to adopt CVCs. Received November 15, 2017; editorial decision March 2, 2019 by Editor Francesca Cornelli. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

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