Financing knowledge-intensive enterprises: evidence from CVCs in the US
Since the 1990s, the importance of corporate venture capital (CVC) programs has grown around the world. CVCs are investments that established firms make in entrepreneurial companies. At the most basic level, CVC describes an equity investment made by a corporation or its investment entity in a high growth, high potential, privately held business. There is no systematic evidence that corporate venture capital investments create value for the investing firms. Firm value, however, can be created as a result of other benefits from investing (e.g., accessing a new technology). These considerations can explain why many firms currently choose to operate venture units: They have recognized the importance of CVC for strategic innovation in addition to its potential to generate financial returns. Some evidence from the US context described in this paper supports this intuition.
KeywordsCorporate venture capital Innovation Financial returns Strategic capabilities Start-ups CVC waves
JEL ClassificationM13 P12 G34 M10 M16
The article is the result of the common reflection of all the authors. In the editing phase, the “Research methodology, objectives, value, and limitations”, “CVC operations: findings”, “The waves of CVC investments”, “From the boom wave to the rethinking wave: trends and the future for the US” sections were written by Matteo Rossi the “Literature review” section was written by Giuseppe Festa the “Introduction to CVC and the presentation of the research” section was written by Ludovico Solima the “Discussion of the results, implications, and limitations” section was written by Simona Popa whereas the “Conclusion” section was written by all the authors.
Compliance with ethical standards
Conflict of interest
The authors declare that they have no conflict of interest.
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