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

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  • Paolo Mazza
  • Fatima Shuwaikh

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.

Suggested Citation

  • Paolo Mazza & Fatima Shuwaikh, 2024. "Industry-relatedness, geographic proximity and strategic decisions of corporate and independent venture capital-backed companies," Journal of Small Business Management, Taylor & Francis Journals, vol. 62(2), pages 966-1003, March.
    • Handle: RePEc:taf:ujbmxx:v:62:y:2024:i:2:p:966-1003
    DOI: 10.1080/00472778.2022.2108432
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