CVC, Investor Leadership, and Technological Influence of New Venture Invention

Corporate venture capital (i.e. CVC) has received increasing attention as important positive antecedent of investee ventures’ innovative performance. Yet, extant literature has mostly focused on the quantity of innovation (e.g. patents count). In this article, we shift the attention towards the quality of innovation of CVC-backed innovative startups. More specifically, we look at technological influence as a novel approach to capture how a specific invention shapes future technological domains. Building on recent works exploring the mechanism underlying the CVC’s effect, we propose CVC leadership (i.e. leadership position of CVCs in the venture’s investors syndicate) as a driving mechanism to explain investee venture’s innovative capabilities development. Analyzing the patents of semiconductor innovative startups from 1985 to 2005, our results suggest that CVC investor leading positions occur in ventures with current technological projects that have less potential for superior inventive capabilities (i.e. lower patent technological influence); yet, once in leading position, CVC investors show a nurturing effect through its leading position improving inventive capabilities of the investee startups. Descriptive evidences suggest that this could be associated to a transfer of technological capabilities. By introducing a temporal dimension to the analysis of the CVC leadership in relation to the investee ventures’ technological influence, our study unfolds further both selection and nurturing effects of the complex relationship between innovative startups and CVC investors.