The Impact of Multiple Corporate Venture Capital on a Venture's Innovation Performance: The Moderating Effect of Geographic Proximity and Industry Relatedness

Philipp Paß & Felix Michael Laurentius Stahl

Student thesis: Master thesis


Entrepreneurial ventures are a crucial source of innovation, yet constraint financial resources impede the full exploitation of their capabilities. Venture capital (VC) investors have become the primary source for financing these high-risk, potentially high-reward businesses. Besides independent venture capital (IVC), investments provided by corporate investors, also known as corporate venture capital (CVC), have gained in relevance over the last decades. Academics and practitioners have suggested that CVCs add value to their portfolio companies, but the evidence is limited. Further, it is well acknowledged that the majority of VC investments are syndicated. However, the phenomenon of syndication among CVC investors, i.e. multiple CVCs (MCVC) invest in the same venture, has mostly been ignored.
This thesis serves as a first attempt to investigate the impact of MCVC investments on a venture’s innovation performance compared to ventures that are funded by only one CVC investor. Moreover, two underlying mechanisms of geographic proximity and industry relatedness are considered. The empirical analysis is based on a sample of 1,506 ventures operating in the software industry, which received equity investments from CVC investors between 1990 and 2015. The results indicate that MCVC does not have an impact per se. However, the results reveal that MCVC has a negative impact on a venture’s innovation performance when geographic proximity is given, whereas industry relatedness does not have a significant impact. This thesis contributes to the entrepreneurial finance, as well as the CVC and innovation literature.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2020
Number of pages106
SupervisorsFrancesco Di Lorenzo