Venture Capitalists and Cooperative Start-up Commercialization Strategy

I examine 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-backed start-ups engage in cooperative commercialization strategies (strategic alliances and/or technology licensing) relative to a comparable set of start-ups, and with what consequences? To address these questions, I assemble a novel dataset that matches firms receiving a federal research and development subsidy through the Small Business Innovative Research program to VC-backed firms by observable characteristics in five technology-intensive industries. This method helps decouple cooperative activity resulting from start-up development associated with the passage of calendar time from that due to association with VCs. An analysis of the 701 start-ups in the sample (split by external funding source) suggests substantial boosts in cooperative activity associated with VC-backed firms, as well as a number of start-up ...

• Type: Journal
• Year: 2006
• Where: MANSCI
• Authors: David H. Hsu
• Keywords: Cooperative Activity, Cooperative Commercialization Strategies, MANSCI 2006, VC-backed Firms