Session 58

Corporate VCs and spin-outs

Track K

Date: Tuesday, October 6, 2015

Track F

Time: 14:15 – 15:30

Paper

Room: Governor's Square 17


Session Chair:

  • William Schulze, University of Utah

Title: Are CVC Investment Skills Valuable?

Authors

  • David Benson, Brigham Young University
  • William Schulze, University of Utah

Abstract: Past research documents that corporations have two performance objectives for CVC investment; to win financial rewards, and to gain access to information about technologies, firms, and markets that is difficult to obtain through other channels.We draw on the strategic factor market and merger and acquisition literatures to explore the prospect that corporations may indeed have a third strategic motive to undertake CVC investment: To acquire the knowledge and skills needed to make strategically valuable acquisitions. Results lend strong support to our conjectures.

Title: Avoiding Market Uncertainties through Corporate Venture Capital Investments

Authors

  • Charlotte Jacobs, Temple University
  • Ronaldo Parente, Florida International University
  • Monica Pinhanez, FGV-EBAPE

Abstract: Why do companies undertake the risk of investing in a venture entrepreneur? Extant literature on corporate venture capital (CVC) has not profoundly explored the drivers of this phenomenon. Former research on CVC, both on its antecedents and consequences, has been dominated by organizational learning theory. However, the sole focus on CVC as instrument for organizational learning has no strong argument and brought us inconsistent results. The purpose of this paper is to broaden the perspective of research on CVC. Our study argues that companies use corporate venture capital to pro-actively control the market they operate. Through the integration of extant literature on CVC and the findings of evolutionary economists, complemented with own qualitative research we present an alternative framework for the restrictive organizational learning perspective.

Title: Selection in the Incidence and Performance of Spinouts

Authors

  • Mariko Sakakibara, University of California-Los Angeles
  • Natarajan Balasubramanian, Syracuse University

Abstract: This study examines the incidence and performance of spinouts relative to other types of new ventures by incorporating selection processes underlying the formation of spinouts. We exploit inter-industry heterogeneity in characteristics along with parent firms’ size and founder quality. Using a matched employer-employee dataset of new ventures covering 30 U.S. states, our evidence is broadly consistent with greater information asymmetry aiding spinouts formed in the same industry as parent firms, and capital intensity acting as an entry barrier to those spinouts. We also find evidence that that spinouts formed outside of parent-firm industries are founded by lower-earning founders, and those spinouts primarily enter low-end segments. Furthermore, incorporating selection appears to significantly affect the estimates of performance differences between spinouts and other types of new ventures.

Title: The “Spin-out Entrepreneur”: Industry Experience, Knowledge Recombination, and Entrepreneurial Behavior

Authors

  • Matteo Landoni, Catholic University of Milan
  • dt ogilvie, Rochester Institute of Technology

Abstract: A spin-out happens when a former employee quits the parent company to start a new venture. Theories do not agree on whether the “spin-out entrepreneur” will start the company in the same market or in a different market with her innovative contribution.
We investigated a sample of 250 entrepreneurs and 120 spin-out companies to understand what led an entrepreneur or a group of founders to enter the same or different market. We also explored how knowledge can recombine in a multi-founders team.
Our results contribute to theory, suggesting that spin-out entrepreneurs usually move to different and innovative industries. Our evidence supports the positive effect of different experiences within the team that induce greater innovation.

All Sessions in Track K...

Sun: 08:00 – 09:15
Session 10: Entrepreneurship in Base-of-the-Pyramid Markets
Sun: 09:45 – 11:00
Session 11: Crowdfunding Research: Present and Future
Sun: 11:15 – 12:30
Session 12: Environmental Entrepreneurship: How and When do Entrepreneurs address Environmental Degradation?
Sun: 16:15 – 17:30
Session 50: Entrepreneurship and Institutional Environment
Sun: 17:45 – 00:00
Session 319: Entrepreneurship and Strategy Business Meeting
Mon: 08:00 – 09:15
Session 56: Family firms
Mon: 11:15 – 12:30
Session 119: Competition and entrepreneurial entry
Mon: 13:45 – 15:00
Session 53: New forms of entrepreneurial funding
Session 97: Accelerators, corporate VCs and new venture creation
Mon: 16:45 – 18:00
Session 59: Entrepreneurship in emerging markets
Session 98: Culture, institutions and entrepreneurship
Tue: 08:00 – 09:15
Session 54: Venture capital and angel financing
Session 118: Entrepreneurial orientation and strategic entrepreneurship
Session 217: Leadership and Governance in Family Firms
Tue: 11:00 – 12:15
Session 51: Academic entrepreneurship
Tue: 14:15 – 15:30
Session 58: Corporate VCs and spin-outs
Session 120: Creativity, knowledge spill overs and a venture's legitimacy
Tue: 15:45 – 17:00
Session 52: Entrepreneurial business models
Session 55: Entrepreneurship and cognitions
Tue: 17:30 – 18:45
Session 57: Entrepreneurial teams
Session 99: Governance and entrepreneurial finance

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 193: Phenomenon-driven Research in Strategic Management
Sun: 09:45 – 11:00
Session 221: Reflecting on the scope of the firm: New avenues for future research
Sun: 11:15 – 12:30
Session 194: The State and Future of Disciplinary Research in Strategic Management
Sun: 16:15 – 17:30
Session 113: Serial Acquisitions: Strategies and Processes
Sun: 17:45 – 00:00
Session 314: Corporate Strategy Business Meeting
Mon: 08:00 – 09:15
Session 111: Portfolio Management: Diversification and Divestitures
Session 176: Different Perspectives Informing Governance Choices: Partner Choice in Alliances vs. Acquisitions
Mon: 11:15 – 12:30
Session 195: Where Are the Boundaries of Strategic Management Research?
Session 210: M&A/JV Implementation
Mon: 16:45 – 18:00
Session 112: Acquisitions - Before the Deal
Session 243: Competitive Dynamics and Market Positioning
Tue: 08:00 – 09:15
Session 115: Horizontal and Vertical Scope: Interactions and Embeddedness
Session 272: Competitive Dimensions of Firm Boundary and Location Decisions
Tue: 11:00 – 12:15
Session 117: Issues and Answers for the Diversified Firm
Session 145: Strategic Leadership and Corporate Strategy
Tue: 14:15 – 15:30
Session 58: Corporate VCs and spin-outs
Session 116: Acquisitions - After the Deal
Session 267: Healthcare Industry Dynamics, Relationships, and Activities
Tue: 15:45 – 17:00
Session 110: Models of Corporate Strategies
Tue: 17:30 – 18:45
Session 114: The Interplay Between Financial Markets & Advisors and the Acquiring Firm
Session 271: Spinouts


Strategic Management Society

Denver