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

Author

Listed:
  • 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)

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, 2022. "Industry-relatedness, geographic proximity and strategic decisions of corporate and independent venture capital-backed companies," Post-Print hal-04550031, HAL.
    • Handle: RePEc:hal:journl:hal-04550031
    DOI: 10.1080/00472778.2022.2108432
    as

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