Open Business Models and Venture Capital Finance
Industrial and Corporate Change, Forthcoming
39 Pages Posted: 10 Dec 2014 Last revised: 26 Jan 2016
Date Written: December 2, 2014
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: Suggested Citation