How does Corporate Venture Capital Emerge? Evidence from the Italian Market

Leonardo Manino & Lorenzo Cocilio

Student thesis: Master thesis

Abstract

To date, scholars focused mainly on answering the questions of the impact of corporate venture capital investing on investee’s performance and parent firms’ patenting output. We investigated what leads to a firm’s first Corporate Venture Capital investment. We drew from researches in the areas of industry inception and organizational learning to elaborate a preliminary conceptual framework of the emergence of Corporate Venture Capital within a firm. We then conducted a case study on the phenomenon in Italy, a context where it is not mature yet. Evidences from the case suggested that few conditions - absorptive capacity developed through R&D investments, technological ferment, financial slack and no- resources and competitive intensity - will prepare the firm for being triggered by particular events, such as the need to access new technologies or industries and the research for synergies, which will drive the firm in an incubation period. During the incubation, actors internal and external to the firm will perform a series of actions - namely deal origination through corporate referrals, internal technical due diligence, deal, and CVC sponsoring, deal evaluation, structuring, and approval - to execute the first corporate venture capital investment. We integrated the framework with the proceedings of the case to present a suitable model of Corporate Venture Capital emergence. We hope this model will spur future research on the evolution of Corporate Venture Capital as a strategic tool for corporations. It is crucial to address the full picture of how companies can use this mode of external corporate venturing to maximize its impact on entrepreneurial dynamism, rate of technological innovation, and economic growth.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages202
SupervisorsFrancesco Di Lorenzo