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Abstract:
Innovativeness of a start-up is regarded as a prerequisite to acquire venture capital. However, it is not obvious how to conceptualize it, nor how to measure it. Based on an extensive literature review, we develop a model of various dimensions of innovativeness of a start-up. In a next step, we use the model in 19 qualitative interviews with venture capital decision makers to study empirically the role of a start-up's innovativeness in the funding decision. We find that a higher level of innovativeness does not necessarily lead to a higher probability of acquiring venture capital. Also, venture capitalists evaluate the various dimensions of innovativeness differentially.
Venture Capital, Innovativeness, Innovative Business Model, Risk Evaluation
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Abstract:
Many patent applications lapse before they are reviewed by patent examiners. In this paper we analyze how even a lapsed patent application yields benefits to the applicant. We argue that these benefits are attributable to pendency and publication of patent applications. Based on an analysis of all direct first filings at the German patent office between 1986 and 2000 we find that more than 20% of all applications are left pending for the maximum of seven years before examination is requested or the application is deemed to be withdrawn. Our findings, which are supported by 25 interviews with inventors, indicate that firms keep patents pending in order to gain time for evaluating if an exclusion right is worth its cost and to create insecurity for competitors. Further 2% of all applications could turn out to have defensive publishing as their sole purpose, that is, the publication of inventions with the purpose of creating prior art. In this way, firms secure freedom to operate (FTO), which is a central precondition for appropriating profits from own-used inventions. This finding gives an indication that, for all other applications, the share of their value attributable to creating FTO might be considerable.
Defensive publishing, motives to patent, intellectual property, freedom to operate, patents, patent pending
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