Business Partners, Financing, and the Commercialization of Inventions

Abstract

This paper studies the effect of business partners on the commercialization of nvention based ventures, and it assesses the relative importance of partners' human and social capital on commercialization outcomes. Projects run by partnerships were five times more likely to reach commercialization, and they had mean revenues approximately ten times greater than projects run by solo-entrepreneurs. These gross differences may be due both to business partners' value added and to selection. After controlling for selection effects and observed/unobserved heterogeneity, our smallest estimate of partner value added approximately doubles the probability of commercialization and increases expected revenues by 29% at the sample mean.