Is a Reputation for Misconduct Always Harmful? Evidence from Corporate Venture Capital

39 Pages Posted: 27 Sep 2021

See all articles by Sergey Anokhin

Sergey Anokhin

St. Cloud State University

Todd Morgan

Western Michigan University

Bill Schulze

University of Utah - David Eccles School of Business

Robert Wuebker

University of Utah - David Eccles School of Business

Date Written: July 2, 2021

Abstract

This paper examines the effect of reputation - good, and bad - on a corporate venture capital (CVC) firm’s ability to attract potential investments. Using an extensive data set that combines information on investments by CVCs with detailed information about lawsuits against those CVC programs, we find that a reputation for experience, active involvement in the startup (rather than passive investment), and misconduct (as indicated by lawsuits) are all positively associated with the CVC's ability to attract investments. Curiously, a reputation for misconduct does not appear to deter startups when the CVC has a reputation for experience but does deter startups if the CVC firm also has reputation for active engagement with its portfolio companies. Further, the results hold despite controlling for generalized favorability of the parent corporation. Our study thus lends support to the notion that a “reputation for what” matters, and that finer grained measures are needed when studying the complex relationship between reputation and performance.

Keywords: Corporate Venture Capital, Misconduct, Reputation, Lawsuits, Entrepreneurial Finance

Suggested Citation

Anokhin, Sergey and Morgan, Todd and Schulze, Bill and Wuebker, Robert, Is a Reputation for Misconduct Always Harmful? Evidence from Corporate Venture Capital (July 2, 2021). Journal of Business Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3878910

Sergey Anokhin

St. Cloud State University ( email )

720 4th Ave S.
St Cloud, MN 56301
United States

Todd Morgan

Western Michigan University ( email )

Kalamazoo, MI 49008
United States

Bill Schulze

University of Utah - David Eccles School of Business ( email )

1645 E Campus Center Dr
Salt Lake City, UT 84112-9303
United States

Robert Wuebker (Contact Author)

University of Utah - David Eccles School of Business ( email )

1645 East Campus Circle Drive
Salt Lake City, UT 84112-9304
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
161
Abstract Views
796
Rank
346,828
PlumX Metrics