Industry-relatedness, geographic proximity and strategic decisions of corporate and independent venture capital-backed companies

Paolo Mazza and Fatima Shuwaikh ()
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Paolo Mazza: LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique
Fatima Shuwaikh: PULV - Pôle Universitaire Léonard de Vinci

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Abstract: In this paper, we use the essential dichotomy between independent venture capital (IVC) and corporate venture capital (CVC) to investigate the investment mechanisms that lead venture-backed companies to take different successful exit routes, that is, an initial public offering (IPO) or an acquisition. Through an analysis of a sample of 4206 US companies, we find that CVC-backed companies have a longer investment duration and a larger investment amount than IVC-backed companies. Our analysis reveals that geographic distance and industry-relatedness are influential for the success of the company. We show that industry-relatedness is more likely to lead to an acquisition exit while geographic proximity rather fosters IPO exits.

Keywords: Corporate venture capital; independent venture capital; geographic proximity; industry-relatedness; exit route (search for similar items in EconPapers)
Date: 2022-08-31
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Citations: View citations in EconPapers (1)

Published in Journal of Small Business Management, 2022, 62 (2), pp.966-1003. ⟨10.1080/00472778.2022.2108432⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04550031

DOI: 10.1080/00472778.2022.2108432

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