Venture Capital Firms’ Specialization, Differences and Complementarities

Siddiqui, A.I., Marinova, D. & Hossain, A. (2016). Venture capital firms’ specialization, differences and complementarities. International Journal of Business and Management; Vol. 11, No. 7

12 Pages Posted: 27 Feb 2015 Last revised: 15 Jun 2016

See all articles by Asif Siddiqui

Asif Siddiqui

Curtin University

Dora Marinova

Curtin University

Amzad Hossain

Curtin University

Date Written: November 15, 2014

Abstract

The paper analyses the differences in venture capital (VC) firms, proposes a classification of the firms and empirically investigates their investment and co-investment behaviour. The VC firms are not homogeneous and beside funds they possess a diverse set of nonfinancial resources which they optimize. A classification is developed based on VC firm resources and specialization represented by organizational form and affiliation. Based on Australian market data, we classify the VC firms in three categories, namely strategic, financial and independent using resource based theory, and highlight differences. Then the firms’ specialization is related to their portfolio characteristics to identify and analyse differences and complementarities in terms of investment strategies. The influence of specialization in investment and co-investment strategies is also analysed. This study shows that specialization influences investment decisions and co-investor selection. Implications of such investment practices on resource efficiency, financial viability and transition to sustainability are also discussed.

Keywords: venture capital, firm resources, specialization, syndication, industry sustainability

JEL Classification: G24, L14, L21, M14, O56

Suggested Citation

Siddiqui, Asif and Marinova, Dora and Hossain, Amzad, Venture Capital Firms’ Specialization, Differences and Complementarities (November 15, 2014). Siddiqui, A.I., Marinova, D. & Hossain, A. (2016). Venture capital firms’ specialization, differences and complementarities. International Journal of Business and Management; Vol. 11, No. 7. Available at SSRN: https://ssrn.com/abstract=2571192 or http://dx.doi.org/10.2139/ssrn.2571192

Asif Siddiqui (Contact Author)

Curtin University ( email )

Kent Street
Bentley
Perth, WA WA 6102
Australia

Dora Marinova

Curtin University ( email )

Kent Street
Bentley
Perth, WA WA 6102
Australia

Amzad Hossain

Curtin University ( email )

Kent Street
Bentley
Perth, WA WA 6102
Australia

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