Funding Innovation in Young Firms: The Case of Minimally Invasive Surgical Devices

Ewing Marion Kauffman Foundation Research Paper

14 Pages Posted: 13 Jan 2011

Date Written: July 1, 2010

Abstract

I compare a variety of investor types and their impact on new firm invention and innovation. I develop and test hypotheses linking different investor types to new firm outcomes using a novel longitudinal dataset of 198 minimally invasive surgical device firms between 1986 and 2007. I find that technology-focused investors promote invention while commercially-focused investors are more beneficial to innovation. I also find that although some investors (VCs) help innovation, other investors (the government’s SBIR program) hurt it. My findings suggest that new firms should be cautious: obtaining resources from some investors may prevent new firms from accomplishing their goals.

Keywords: Innovation, Entrepreneurship, Finance, New Firm Innovation, Venture Capital, Corporate Venture Capital, Government Funding, Medical Devices, Entrepreneurship

Suggested Citation

Cox Pahnke, Emily, Funding Innovation in Young Firms: The Case of Minimally Invasive Surgical Devices (July 1, 2010). Ewing Marion Kauffman Foundation Research Paper, Available at SSRN: https://ssrn.com/abstract=1734900 or http://dx.doi.org/10.2139/ssrn.1734900

Emily Cox Pahnke (Contact Author)

University of Washington ( email )

Seattle, WA 98195
United States

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