Abstract
This paper develops a theoretical model where a startup seeks financing from an investor in order to develop an idea into a commercial project. Investors that possess valuable complementary assets can contribute the most to the success of the startup but also have the strongest incentives to misappropriate the idea. The startup chooses not to contract with such investors when (i) IPRs and other protection mechanisms are weak, and (ii) the initial upfront investment is limited relative to the value of the project. Large private benefits to the investor, e.g., in the form of learning benefits, decrease misappropriation incentives and result in better matches between startups and investors
Original language | English |
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Publication date | 2021 |
Number of pages | 20 |
Publication status | Published - 2021 |
Event | DRUID21 Conference - Copenhagen Business School, Frederiksberg, Denmark Duration: 18 Oct 2021 → 20 Oct 2021 Conference number: 42 https://conference.druid.dk/Druid/?confId=62 |
Conference
Conference | DRUID21 Conference |
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Number | 42 |
Location | Copenhagen Business School |
Country/Territory | Denmark |
City | Frederiksberg |
Period | 18/10/2021 → 20/10/2021 |
Internet address |
Keywords
- Corporate venture capital
- Startups
- Innovation