Transferability of the Venture Capital Model to the Corporate Context: Implications for the Performance of Corporate Venture Units

Strategic Entrepreneurship Journal, Vol. 3, No. 1, pp. 3-27

Posted: 2 Sep 2008 Last revised: 29 Apr 2009

See all articles by Susan A. Hill

Susan A. Hill

Cass Business School, City University London

Markku V. J. Maula

Aalto University, Dept. of Industrial Engineering and Management, Institute of Strategy

Julian Birkinshaw

London Business School

Gordon C. Murray

University of Exeter Business School

Date Written: March 1, 2009

Abstract

While recent literature has advocated the transfer of venture capital (VC) practices and structures to corporate venture (CV) units, the wisdom of this advice has not been subject to rigorous empirical scrutiny. We test the implications of the VC model for CV unit performance using a longitudinal database combining survey, archival and survival data on 95 CV units. VC model elements of high-powered incentives, autonomous organization, investment syndication, investment staging, and specialization were each associated with higher CV unit performance. Critically, different elements of the VC model predicted improvements in either strategic or financial performance in CV units. Survival of the CV unit was strongly associated with employing the VC model, partially mediated by enhanced performance.

Keywords: Corporate venture unit, Venture capital, Financial performance, Strategic performance, Survival, Practice transfer

JEL Classification: D21, G24, M13, M21, O32

Suggested Citation

Hill, Susan A. and Maula, Markku V. J. and Birkinshaw, Julian and Murray, Gordon C., Transferability of the Venture Capital Model to the Corporate Context: Implications for the Performance of Corporate Venture Units (March 1, 2009). Strategic Entrepreneurship Journal, Vol. 3, No. 1, pp. 3-27. Available at SSRN: https://ssrn.com/abstract=1262247

Susan A. Hill (Contact Author)

Cass Business School, City University London ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Markku V. J. Maula

Aalto University, Dept. of Industrial Engineering and Management, Institute of Strategy ( email )

PO Box 15500
FI-00076 AALTO
Espoo
Finland

HOME PAGE: http://users.tkk.fi/u/mmaula/

Julian Birkinshaw

London Business School ( email )

Sussex Place
Regent's Park
London, London NW1 4SA
United Kingdom

Gordon C. Murray

University of Exeter Business School ( email )

Streatham Court
Rennes Drive
Exeter EX4 4PU
United Kingdom
+44 777 522 0857 (Phone)

HOME PAGE: http://business-school.exeter.ac.uk/staff/profile.php?id=34

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