Search results

1 – 10 of over 21000
Book part
Publication date: 4 August 2014

Janke Dittmer, Joseph A. McCahery and Erik P. M. Vermeulen

There is arguably a balance between exploration and exploitation within a commercial organization which leads to sustainable growth and value creation. Exploratory…

Abstract

There is arguably a balance between exploration and exploitation within a commercial organization which leads to sustainable growth and value creation. Exploratory activities are associated with search, innovation, risk-taking and experimentation. Activities, such as selection, implementation and execution are considered exploitative in nature. We show that the governance structures and mechanisms that are typically employed in venture capital-backed companies ensure an optimum balance between the exploratory behavior of entrepreneurs and the exploratory focus of venture capitalists. New players in the venture capital cycle, such as crowdfunding platforms and corporate venture capital units, often fail to understand the importance of the interaction and interrelation between the apparently opposing exploratory and exploitative activities. However, collaborative venture capital models that are currently emerging appear to restore the necessary equilibrium in the “new” venture capital cycle.

Details

Exploration and Exploitation in Early Stage Ventures and SMEs
Type: Book
ISBN: 978-1-78350-655-2

Keywords

Book part
Publication date: 13 October 2016

Tim C. Hasenpusch and Sabine Baumann

The fast-changing, highly competitive and technology-driven business environment forces established firms to continually search for new business opportunities and…

Abstract

The fast-changing, highly competitive and technology-driven business environment forces established firms to continually search for new business opportunities and innovative ideas. In reaction, corporations such as Google, Microsoft, Cisco and Bertelsmann have launched new corporate venture capital (CVC) units or have intensified existing CVC activities. This chapter examines the structure, patterns and investment focus of telecommunication, IT, consumer electronics and media & entertainment firms’ CVC investments by conducting a data-mining project based on the Thomson Reuters Private Equity database. The data-mining project reveals the increasing importance of CVC activities as a strategic development tool to address the requirements of the increasing costs, speed and complexity of a technology-driven industry since the bursting of the Internet bubble. Therefore, following chapter is one of the first CVC studies to describe and compare CVC investments of the last CVC wave across industry sectors.

Details

Mergers and Acquisitions, Entrepreneurship and Innovation
Type: Book
ISBN: 978-1-78635-371-9

Keywords

Article
Publication date: 1 December 1995

Kevin McNally

The availability of external equity finance is a key factor in thedevelopment of technology‐based firms (TBFs). However, although a widevariety of sources are potentially…

5447

Abstract

The availability of external equity finance is a key factor in the development of technology‐based firms (TBFs). However, although a wide variety of sources are potentially available, many firms encounter difficulties in securing funding. The venture capital community, particularly in the UK, has done little to finance early stage TBFs and has failed to cater adequately for the specific value‐added requirements of these firms. Non‐financial companies have the potential to become an important alternative source of equity finance for TBFs through the process of corporate venture capital (CVC) investment. Based on a telephone survey of 48 UK TBFs that have raised CVC, examines the role of CVC in the context of TBF equity financing. Shows that CVC finance has represented a significant proportion of the total external equity raised by the survey firms and has been particularly important during the early stages of firm development. In addition, CVC often provides investee firms with value‐added benefits, primarily in the form of technical‐ and marketing‐related nurturing and credibility in the marketplace. Concludes with implications for TBFs, large companies, venture capital fund managers and policy makers.

Details

International Journal of Entrepreneurial Behavior & Research, vol. 1 no. 3
Type: Research Article
ISSN: 1355-2554

Keywords

Article
Publication date: 11 September 2007

L. Gregory Henley

The purpose of this article is to describe how investing in entrepreneurial ventures can help large firms pursue corporate entrepreneurship initiates. Ventures can be

2516

Abstract

Purpose

The purpose of this article is to describe how investing in entrepreneurial ventures can help large firms pursue corporate entrepreneurship initiates. Ventures can be attractive partners due to their ability to provide a disproportionate share of radical innovations.

Design/methodology/approach

Based on existing literature and information collected via 45 surveys and 72 interviews, the paper shows that strategic fit is an important variable that determines the type of benefits ventures can provide to investing firms.

Findings

Three benefits large firms can reap from investing in ventures are: managing the risks and uncertainties of innovation; learning from the venture; and increasing bargaining power over ventures that supply innovative products.

Research limitations/implications

Existing research does not go far enough to explain the range of benefits corporate venture capital can provide. The majority of investments were found in ventures that sell innovative products to the investing firm and have technological competences different from the investing firm.

Practical implications

Organizing for innovation is often a challenge for large firms. Because ventures may be more effective when started outside the firm than inside, investing in select entrepreneurial ventures can help firms effectively explore for radical innovation while continuing to exploit their existing resources internally.

Originality/value

For corporate strategists concerned about improving their firm's innovativeness, corporate venture capital can be part of a corporate entrepreneurship toolbox that can help augment a large firm's growth and competitive position. It can be particularly helpful in managing the risks and uncertainties inherent with radical innovation.

Details

Journal of Business Strategy, vol. 28 no. 5
Type: Research Article
ISSN: 0275-6668

Keywords

Article
Publication date: 16 February 2022

Weiqi Dai, Yi Wang, Mingqing Liao, Mei Shao, Yue Jiang and Miao Zhang

One increasingly popular financing option for entrepreneurial ventures is to attract corporate venture capital (CVC) investments. Prior research tends to take a…

Abstract

Purpose

One increasingly popular financing option for entrepreneurial ventures is to attract corporate venture capital (CVC) investments. Prior research tends to take a CVC-centric perspective assessing the benefits and contingencies for incumbent firms or corporate investors to engage with entrepreneurial ventures. Few studies have taken the opposite perspective of investigating factors that entrepreneurial ventures need to take into account when engaging with CVC investments. As such, this study aims to investigate pre- and post-IPO entrepreneurial venture performance that partners with CVC providers or corporate investors, as well as to assess organizational and environmental contingencies.

Design/methodology/approach

This study draws on a sample of 631 entrepreneurial ventures from the CSMAR database ranging from 2009 to 2019, along with CVC financing data from the CVSource database and financial data in entrepreneurial ventures’ annual reports from the Juchao Network. This study applies multiple linear regression modelling and fixed effect panel data analyses to test the proposed hypotheses.

Findings

The results show that CVC investment contributes to entrepreneurial ventures’ financial performance, both pre- and post-IPO. However, while research and development (R&D) intensity and geographic proximity strengthen the positive relationship between CVC investment and entrepreneurial ventures’ performance pre-IPO, R&D intensity has a negative moderating effect on the relationship between CVC investment and entrepreneurial ventures’ performance post-IPO.

Practical implications

First, in emerging economies, adopting a CVC financing strategy is an important strategic choice for entrepreneurial ventures that have a great demand for external capital, resources and technology support. Second, leveraging the relationship between external financing and internal R&D investment is essential for them to maintain their core competitiveness and sustainable growth. Moreover, entrepreneurial ventures should deal with the coopetitive relationship with incumbent companies and manage their dependency on other market participants in the external environment.

Originality/value

This study focuses on the performance implications for entrepreneurial ventures engaging with CVC investments pre- and post-IPO. First, this study broadens and expands prior research on the mechanism of the relationship between CVC and entrepreneurial ventures’ financial performance. Second, the research conducts a comparative study of the moderating effects of different timings. Third, this study applies learning theory to the field of CVC in emerging economies.

Details

Journal of Entrepreneurship in Emerging Economies, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4604

Keywords

Article
Publication date: 1 October 2001

R.H. Hamilton

New venture “startups” are financed via three standard methods: self‐funding, “friends and family” or possibly “angel” investors; seed capital from venture capitalists;…

2950

Abstract

New venture “startups” are financed via three standard methods: self‐funding, “friends and family” or possibly “angel” investors; seed capital from venture capitalists; and large corporations’ venture funds. Each of these financial structures has its own set of risk and reward trade‐offs. Corporate venture funding has been seen as the least risky funding method, but also the least likely to be available for the entrepreneur. Each of these funding methods is likely to engender a different kind of corporate culture that could impact the e‐commerce venture’s long‐term development. The self‐ or privately‐funded company must continuously scramble for scarce funds and may not be able to develop internally the necessary culture of knowledge creation. Companies supported primarily by venture capitalists may develop a culture that over‐focuses on quick return of capital to investors. Alternatively, the slow decision‐making processes of large corporations are often antithetical to Internet time.

Details

Internet Research, vol. 11 no. 4
Type: Research Article
ISSN: 1066-2243

Keywords

Book part
Publication date: 18 July 2006

Markku V.J. Maula, Erkko Autio and Gordon Murray

The present study develops a multi-theoretic framework of the mechanisms of value creation in interorganizational relationships and of the key factors influencing those…

Abstract

The present study develops a multi-theoretic framework of the mechanisms of value creation in interorganizational relationships and of the key factors influencing those mechanisms. The integrative use of several theories in building the model is justified by numerous studies suggesting that a multi-theoretic approach is required to understand the complexity of interorganizational relationships (Gulati, 1998; Osborn & Hagedoorn, 1997; Park et al., 2002). We believe that the relationships between start-up companies and their corporate investors, with each party holding a diversity of strategic and financial objectives, are not less complex than other potential interorganizational relationships. They may therefore also require ideas from several theories to be properly understood. In this study, we build the models applying primarily the resource-based and the knowledge-based views, as well as social capital theory. Ideas from other theoretical approaches are used to complement these theories.

Details

Entrepreneurship: Frameworks And Empirical Investigations From Forthcoming Leaders Of European Research
Type: Book
ISBN: 978-1-84950-428-7

Article
Publication date: 1 March 1979

A. David Silver

Rumors to the effect that venture capital died in the early 1970s are untrue. It is true, however, that the decline of stock market values has accelerated the flight of…

Abstract

Rumors to the effect that venture capital died in the early 1970s are untrue. It is true, however, that the decline of stock market values has accelerated the flight of risk dollars to other arenas, such as options and commodities. It is similarly true that the number of Small Business Investment Companies (SBICs) and venture capital firms has shrunk from over 800 in 1972 to less than 400 in 1978.

Details

Planning Review, vol. 7 no. 3
Type: Research Article
ISSN: 0094-064X

Article
Publication date: 1 June 2006

Rajagopal

The purpose of this research is aimed at discussing the external and internal strategic fit in corporate ventures in Latin America.

3403

Abstract

Purpose

The purpose of this research is aimed at discussing the external and internal strategic fit in corporate ventures in Latin America.

Design/methodology/approach

This study is based on empirical investigation through semi‐structured interviews administered to the managers of multinational companies operating in Mexico. The success of the corporate ventures in Mexico has been evaluated from the perspectives of economic and relational attributes. The results of the study showed that the degree of fit between a corporate parent and venture affects the success of the venture. The success is associated with high levels of commitment, competitive skills and dynamics in the functional management of the venture. In this study the variables of economic and relational dimensions of external and internal fit have shown greater association with venture success. It has also been found that ventures opt for greater autonomy and less economic dependency with their parent ventures for leading success and these findings make an intuitive sense.

Findings

The study may have limitations on generalizing some of the findings because of the survey type study.

Research limitations/implications

Corporate venturing as a strategy for international business development has become significant in view of the process of globalization resulting in free trade and business development opportunities for multinational companies. This study provides an understanding of the venture managers to succeed in Latin American business environments in view of the organizational culture and employee behaviour.

Practical implications

This paper is based on the economic and behavioural indicators affecting strategic fit in the corporate venture.

Originality/value

This paper would contribute to important areas in Latin American business where such studies are scarce.

Details

Management Decision, vol. 44 no. 5
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 19 August 2020

Yonghong Jin, Meng Xu, Wei Wang and Yuqin Xi

The purpose of this paper is to discuss how venture capital institutions can use their syndicated investment network to help listed companies to achieve better performance…

Abstract

Purpose

The purpose of this paper is to discuss how venture capital institutions can use their syndicated investment network to help listed companies to achieve better performance in mergers and acquisitions (M&A) activities.

Design/methodology/approach

This paper builds a fixed effect unbalanced panel regression model to study the impact of venture capital network on the M&A performance of listed companies.

Findings

Evidence indicated that the stronger the information resource acquisition ability of venture capital institutions in the network, the better the listed company's M&A performance supported; the stronger the information resource control ability of venture capital institutions in the network, the better the listed company's M&A performance supported; the higher the participation of venture capital institutions, the more significant the positive impact of information resource acquisition and information resource control abilities on M&A performance in the network.

Research limitations/implications

The data in this paper are from China's Growth Enterprise Market (GEM), other markets may be considered in the future research studies.

Practical implications

The research conclusions of this paper affirm the positive role played by venture capital institutions through syndicated investment in eliminating information asymmetry in M&A of invested companies. The information resource acquisition and control abilities and participation degree of the venture capital network have positively promoted the M&A performance of the invested enterprises.

Originality/value

The conclusions of this paper not only provide useful supplements to existing research literature on venture capital network functions and corporate M&A but also have certain guiding value for venture capital institutions and start-ups to better use venture capital practices to improve their capabilities and performance.

Details

China Finance Review International, vol. 11 no. 1
Type: Research Article
ISSN: 2044-1398

Keywords

1 – 10 of over 21000