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How Does Corporate Venture Capital Work? A Comparison With Traditional Venture Capital

Posted on:2014-04-07Degree:MasterType:Thesis
Country:ChinaCandidate:Eugenio ORLANDOFull Text:PDF
GTID:2309330464455527Subject:Business management
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This study is constructed on a database covering 41,756 single venture capital deals observed across the United States and the European Union between 1993 and 2013. Its purpose is to analyze the dynamics of corporate venture capital investments and to identify any relevant pattern arising from a comparison with traditional venture capital investments. Several statistical tools were employed to pursue this research, including simple OLS regression, t-test for differences in means and multicollinearity test. However, the pillar of our analysis is represented by a multivariate probit regression model, whereby several variables were tested. We considered variables measuring the investment amount, the number of financing rounds, the fund stage focus, and the propensity towards syndication. Moreover, sector-based and geographical patters were examined. The findings of this study are consistent with our arguments that, compared to traditional venture capital investors, corporate venture capitalists are on average associated with higher investment amounts, are more likely to finance over a lower number of rounds and to invest in start-ups at a later stage of their business cycle. Corporate venture capitalists have also a stronger tendency towards syndication than traditional venture capital firms. Finally, we find that corporate venture capital funds are more likely to invest in locations beyond their regional and national boundaries than do traditional venture capital funds. In this regard, this research adds much on the existing literature about corporate venture capital and in particular on that branch of the literature focused on the geographical patterns of venture capital industry.
Keywords/Search Tags:corporate venture capital, investment patterns, venture capital, geography of venture capital
PDF Full Text Request
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