Hypercompetition in venture capital: implications and competitive advantage strategies for VC funds

Florian Brinkmann and Dominik K. Kanbach

International Journal of Entrepreneurial Venturing, 2023, vol. 15, issue 5, 423-444

Abstract: Prior research has indicated that hypercompetition exists in the venture capital (VC) market. However, it remains poorly understood what implications arise from hypercompetition on VCs' strategies and operational activities and how VC funds can capitalise their competitive advantages and signal investor quality to start-ups and limited partners. To fill this knowledge gap, we use inductive qualitative research and grounded theory as a research strategy. Our results offer evidence that hypercompetition requires strategic and operational adaptability to new market dynamics and a strong need to develop competitive strategies and improve fund capabilities. We harness the different VC fund strategies from our sample to derive dynamic fund strategies to support quality signalling and exploitation of competitive advantages. The six fund strategies differ based on fund size, capabilities and degree of adaptability. Our study contributes to the literature by addressing the topic of fund strategy formulation and competitive advantages in high-competitive market dynamics.

Keywords: venture capital; corporate venture capital; fund strategy; investment strategy; dynamic strategy; competitive advantage; competition; competitive advantage; hypercompetition; quality signal. (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=134930 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijeven:v:15:y:2023:i:5:p:423-444

Access Statistics for this article

More articles in International Journal of Entrepreneurial Venturing from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().