Corporate Venture Capital and Startup Outcomes: The Roles of Investment Timing and Multiple Corporate Investors

The effects of corporate venture capital (CVC) investments on ventures' revenues and innovation-related outcomes depend on the characteristics of the investors and on the dynamics of the investment process. Recently, venture financing literature has highlighted the importance of investment timing as a driver for investee ventures development and success. Building on the literatures on complementary assets and relative absorptive capacity, we explore how the timing of CVC investments affects ventures' revenues and R&D intensity. Using a dataset of Norwegian ventures in knowledge-intensive industries, we find evidence for a differential effect of CVC investments when comparing a venture's early- and late-stage, showing that investments received in late-stage increase ventures' revenues, but decrease ventures' R&D intensity. Further, we find that syndication with multiple CVC investors amplifies this effect. This study contributes to the understanding of the CVC-venture relationship and the impact on venture's post-CVC outcomes.