The Innovation Rush: How Foreign Corporate Venture Capitals are Moving Overseas to Conquer US Ventures

Abstract

The thesis provides insights into the mechanisms influencing the innovation of US ventures when receiving foreign CVC investment. Findings suggest that when dealing with barriers posed by the liability of distant search, CVCs must rely on proximity, relational, and timing mechanisms that lower the obstacles of distance. They must consider Proximity Factors, such as the location of the fund and the industry relatedness, that positively impact the exchange of knowledge and resources. Then, they must carefully balance their Relational Ties, which have a contingent impact on the nature of the counterpart. Finally, they must be mindful of the timing of investment, which plays a significant role in determining the needs and motivations of the recipient venture. The research contributes to the existing knowledge on CVC investments, introducing new international considerations. This provides valuable lessons for foreign CVCs and U.S. startups undertaking cross-border investment relationships.