Corporate Venture Capital and Startup Outcomes: The Roles of Investment Timing and Multiple Corporate Investors

Francesco Di Lorenzo and Christopher Albert Sabel

Industry and Innovation, 2024, vol. 31, issue 5, 638-665

Abstract: The effects of corporate venture capital (CVC) investments on ventures’ revenues and innovation-related outcomes depend on the characteristics of the investors and on the dynamics of the investment process. Recently, venture financing literature has highlighted the importance of investment timing as a driver for investee ventures development and success. Building on the literatures on complementary assets and relative absorptive capacity, we explore how the timing of CVC investments affects ventures’ revenues and R&D intensity. Using a dataset of Norwegian ventures in knowledge-intensive industries, we find evidence for a differential effect of CVC investments when comparing a venture’s early- and late-stage, showing that investments received in late-stage increase ventures’ revenues, but decrease ventures’ R&D intensity. Further, we find that syndication with multiple CVC investors amplifies this effect. This study contributes to the understanding of the CVC-venture relationship and the impact on venture’s post-CVC outcomes.

Date: 2024
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DOI: 10.1080/13662716.2023.2173561

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