Temporal Dynamics of CVC and VC Investments in Relation to Start-ups' IP Right Filing Activities along the Venture Cycle

Markus Liedtke & Tabea Sophia Severin

Student thesis: Master thesis

Abstract

This thesis calls attention to and addresses the phenomenon of temporal dynamics of Corporate Venture Capital (CVC) and Venture Capital (VC) investments in relation to start-ups’ intellectual property (IP) right filings along the venture cycle, which represents a gap in extant research. While scholars partly examined different roles and effects of patents and trademarks in the pre- and post-investment stage as well as different impacts of CVC and VC investments on ventures’ IP portfolio and overall success, it remains unclear how the four factors interact dependent on their temporal occurrence along the venture cycle – hence, which temporal dynamics prevail. Thereby, a better understanding in this field could arguably mitigate high uncertainties that investors and entrepreneurs face in the investment process and the decision-making.
In order to address the overarching research question relating to temporal dynamics resulting from reciprocal and interrelated effects along the venture cycle, the research in this thesis focuses on clarifying partial effects and dynamics. Thereby, literature is reviewed in an integrative manner in order to obtain an overview and construct a conceptual framework. This helps to disclose underlying gaps and enables a synthesis of knowledge in form of theoretical propositions addressing the revealed gaps. Accordingly, the gap of trademarks’ signalling effect on CVCs is identified, while it is proposed that trademarks have (1) a lower signalling effect on CVC than on VC as well as (2) a lower signalling effect on CVC than patents. Moreover, a partial temporal dynamic is proposed, namely that early CVC funding decreases ventures’ trademark output, which in turn is related to a lower likelihood for the venture to have an IPO (3). Even though the broad tendencies resulting from a subsequent descriptive analysis of data on investment sequences, used as illustrative cases, are only in line with the second proposition, the findings highlight the importance for a consideration of complementary effects of patents and trademarks on CVC funding in future research.
Overall, the thesis provides a starting point and foundation for future research on the highlighted phenomenon.

EducationsMSc in International Marketing and Management, (Graduate Programme) Final ThesisMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2020
Number of pages158
SupervisorsFrancesco Di Lorenzo