Are entrepreneurial ventures' innovation rates sensitive to investor complementary assets? Comparing biotech ventures backed by corporate and indepedendent VCs

Alvarez-Garrido, E and Dushnitsky, G (2015) Are entrepreneurial ventures' innovation rates sensitive to investor complementary assets? Comparing biotech ventures backed by corporate and indepedendent VCs. Strategic Management Journal, 37 (5). pp. 819-834. ISSN 0143-2095

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Official URL: http://onlinelibrary.wiley.com/doi/10.1002/smj.235...

Abstract

Entrepreneurial ventures are a key source of innovation. Nowadays, ventures are backed by a wide array of investors whose complementary asset profiles differ significantly. We therefore assert that entrepreneurial ventures can no longer be studied as a homogeneous group. Rather, we harness the inherent dichotomy in the profiles of independent VCs and corporate investors to study ventures' innovation outcomes. Our sample consists of 545 U.S. biotechnology ventures founded between 1990 and 2003 and backed by independent venture capitalists (VCs) or corporate VCs (CVC). We find CVCs' investees exhibit higher rates of innovation output, compared to independent VC-backed peers. Moreover, the performance of CVC-backed ventures is sensitive to their ability to leverage corporate assets, underscoring the role of CVC accessibility and FDA approval requirements as the mechanisms associated with CVC contribution.

Item Type: Article
Additional Information: © 2014 John Wiley & Sons
Subjects: E > Entrepreneurs
I > Investment appraisal
Subject Areas: Strategy and Entrepreneurship
DOI: 10.1002/smj.2359
Date Deposited: 24 Nov 2016 12:31
Last Modified: 21 Apr 2017 12:59
URI: http://lbsresearch.london.edu/id/eprint/653

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