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This paper examines the possible impact of venture capital (VC) backing on the commercialization direction of technology-based start-ups by asking: To what extent (if at all) do VC-funded start-ups engage in cooperative commercialization strategies (strategic alliances or technology licensing, or both) relative to a comparable set of start-ups, and with what consequences? To address these questions, I assemble a novel data set that matches firms receiving a federal research and development subsidy through the U.S. Small Business Innovative Research program to VC-funded firms by observable characteristics in five technology-intensive industries. These data allow decoupling of cooperative activity resulting from start-up development via the passage of calendar time from that due to association with VCs. An analysis of the 696 start-ups in the sample (split by an external funding source) suggests substantial boosts in both cooperative activity associated with VC-backed firms and in the likelihood of an initial public offering.
entrepreneurial ventures, venture capital, cooperation, commercialization strategy, strategic alliances, initial public offerings
Hsu, D. H. (2006). Venture Capitalists and Cooperative Start-up Commercialization Strategy. Management Science, 52 (2), 204-219. http://dx.doi.org/10.1287/mnsc.1050.0480
Date Posted: 27 November 2017
This document has been peer reviewed.