Open Business Models and Venture Capital Finance

Industrial and Corporate Change, Forthcoming

39 Pages Posted: 10 Dec 2014 Last revised: 26 Jan 2016

See all articles by Massimo G. Colombo

Massimo G. Colombo

Politecnico di Milano

Douglas J. Cumming

Florida Atlantic University

Ali Mohammadi

Copenhagen Business School - Department of Strategy and Innovation; KTH Royal Institute of Technology

Cristina Rossi‐Lamastra

Polytechnic University of Milan - Department of Management, Economics and Industrial Engineering

Anu Wadhwa

Ecole Polytechnique Fédérale de Lausanne - Management of Technology and Entrepreneurship Institute (MTEI)

Date Written: December 2, 2014

Abstract

We investigate the differences in venture capital (VC) governance of investee firms with Open Business Models (OBMs), specifically Open Source Software (OSS), versus closed business models. Due to OSS’s pronounced complexity and uncertainty, we conjecture that VC-backed OSS firms are more frequently staged and syndicated. We present robust empirical evidence from the US that OSS ventures have more financing rounds and are more likely to be syndicated, and mixed evidence that OSS ventures have a larger number of syndicated investors.

Keywords: Open Business Model, Entrepreneurial Venture, Open Source Software, Venture Capital

JEL Classification: G24, L17, L26, O31

Suggested Citation

Colombo, Massimo G. and Cumming, Douglas J. and Mohammadi, Ali and Rossi‐Lamastra, Cristina and Wadhwa, Anu, Open Business Models and Venture Capital Finance (December 2, 2014). Industrial and Corporate Change, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2535793 or http://dx.doi.org/10.2139/ssrn.2535793

Massimo G. Colombo

Politecnico di Milano ( email )

Piazza Leonardo da Vinci, 32
20113 Milan
Italy

Douglas J. Cumming

Florida Atlantic University ( email )

777 Glades Rd
Boca Raton, FL 33431
United States

HOME PAGE: http://booksite.elsevier.com/9780124095373/

Ali Mohammadi (Contact Author)

Copenhagen Business School - Department of Strategy and Innovation ( email )

Kilen
Frederiksberg, 2000
Denmark

KTH Royal Institute of Technology ( email )

Stockholm
Sweden

Cristina Rossi‐Lamastra

Polytechnic University of Milan - Department of Management, Economics and Industrial Engineering

Via Lambruschini 4C - building 26/A
Milano, 20156
Italy

Anu Wadhwa

Ecole Polytechnique Fédérale de Lausanne - Management of Technology and Entrepreneurship Institute (MTEI) ( email )

Odyssea
Station 5
Lausanne, 1015
Switzerland

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