Business builders, contractors, and entrepreneurs — An exploratory study of IP venturing funds

Svenja Jarchow and Andrea Röhm

Journal of Small Business Management, 2023, vol. 61, issue 4, 1451-1496

Abstract: Despite the importance of investments in innovative ventures, riskiness often deters investors. We investigate the phenomenon of intellectual property (IP) venturing funds, which commercialize technology via start-up creation. Based on six cases analyzed at the deal and fund level, we establish a dichotomy of investment styles. In an opportunity-driven investment style, funds act as entrepreneurs and are compensated for opportunity recognition. In a technology-driven investment style, funds act as contractors, applying novel mechanisms to reduce agency costs and keep due diligence costs low. Thus, we contribute to knowledge of new investment models in entrepreneurial finance and how they manage agency risks.

Date: 2023
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DOI: 10.1080/00472778.2020.1844485

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