Corporate Venture Capital and the Nature of Innovation

Hannes Maxin ()

Hannover Economic Papers (HEP) from Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät

Abstract: This paper investigates a model where two corporate venture capital firms (CVCs) decide whether to finance a new venture stand-alone or together, called syndication. The CVCs obtain a cash flow if the venture succeeds. In addition, the venture has a positive or negative effect on an asset of the CVCs parental companies. This effect may differ among the parental companies. I show that the CVC faced with the weaker positive effect becomes the stand-alone investor only if the expected cash flow is low. Otherwise, in equilibrium, there are only syndicates or stand-alone investments of the CVC with the stronger positive effect. However, if one CVC faces a positive effect on its parental company's asset whereby the opponent faces a negative effect, then a syndicate is still possible. The model generates empirical predictions for syndicates consisting of several CVCs.

Keywords: Corporate Venture Capital; Venture Capital; Nonmonetary Support; Nature of Innovation (search for similar items in EconPapers)
JEL-codes: G24 M13 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2017-08
New Economics Papers: this item is included in nep-cfn, nep-cse and nep-ino
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http://diskussionspapiere.wiwi.uni-hannover.de/pdf_bib/dp-603.pdf (application/pdf)

Related works:
Journal Article: Corporate venture capital and the nature of innovation (2020)
Working Paper: Corporate Venture Capital and the Nature of Innovation (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:han:dpaper:dp-603

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