Abstract
When acting as an intermediary, corporate venture capital (CVC) units must balance two different institutional settings: the rigid corporate world and the advancing startup ecosystem. As a result, CVC units are faced with multiple voids that influence their organizational orientation toward one environment. This study employs text analysis on a unique sample of 22 CVC dyads to introduce a novel empirical way of measuring isomorphic variation over time. Following a mixed-method approach, the quantitative results are used to shed light on potential drivers of isomorphism, compiled by semi-structured interviews. The findings demonstrate that the degree of isomorphism is not only determined by decisions made during the initial phase of a CVC unit but also from mimetic processes that occur within the life span of such investment vehicles. The study thereby contributes to the ongoing academic discussion by elucidating potential drivers of isomorphism and provides researchers with a novel way to measure isomorphic tendencies based on organizational text excerpts.
A major portion of this chapter is reused from the doctoral dissertation “The Phenomenon of Corporate Venture Capital from an Entrepreneurial Finance Perspective” by Patrick Röhm, awarded by the University of Hohenheim (Germany) in 2018.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
- 2.
Please note that the search considered all CVC units recorded in VentureSource and was not limited to a specific time frame or country.
- 3.
References
Al-Anazi, S., AlMahmoud, H., & Al-Turaiki, I. (2016). Finding similar documents using different clustering techniques. Procedia Computer Science, 82(1), 28–34. https://doi.org/10.1016/j.procs.2016.04.005.
Alvarez-Garrido, E., & Dushnitsky, G. (2016). Are entrepreneurial venture’s innovation rates sensitive to investor complementary assets? Comparing biotech ventures backed by corporate and independent VCs. Strategic Management Journal, 37(5), 819–834. https://doi.org/10.1002/smj.2359.
Anokhin, S., Örtqvist, D., Thorgren, S., & Wincent, J. (2011). Corporate venturing deal syndication and innovation: The information exchange paradox. Long Range Planning, 44(2), 134–151. https://doi.org/10.1016/j.lrp.2010.12.005.
Asel, P., Park, H. D., & Velamuri, S. R. (2015). Creating values through corporate venture capital programs: The choice between internal and external fund structures. Journal of Private Equity, 19(1), 63–72. http://www.jstor.org/stable/43967372.
Bannier, C. E., Pauls, T., & Walter, A. (2017). CEO-speeches and stock returns. Working-paper.
Bannock Consulting. (2001). Corporate venturing in Europe. Accessed January 20, 2016, from https://cordis.europa.eu/pub/innovation-policy/studies/isbn_92-894-0630-5_en.pdf
Benson, D., & Ziedonis, R. H. (2010). Corporate venture capital and the returns to acquiring portfolio companies. Journal of Financial Economics, 98(3), 478–499. https://doi.org/10.1016/j.jfineco.2010.07.003.
Bryant, P. (2009). Self-regulation and moral awareness among entrepreneurs. Journal of Business Venturing, 24(5), 505–518. https://doi.org/10.1016/j.jbusvent.2008.04.005.
Bukh, P. N., Nielsen, C., Gormsen, P., & Mouritsen, J. (2005). Disclosure of information on intellectual capital in Danish IPO prospectuses. Accounting, Auditing & Accountability Journal, 18(6), 713–732. https://doi.org/10.1108/09513570510627685.
Burns, T., & Stalker, G. M. (1961). The management of innovation. London: Tavistock.
CB Insights. (2018). Accessed June 5, 2018, from https://www.cbinsights.com/research/report/corporate-venture-capital-history
Chesbrough, H. W. (2002). Making sense of corporate venture capital. Harvard Business Review, 80(3), 90–99.
Creswell, J. W. (2003). Research design: Qualitative, quantitative, and mixed methods approaches. Thousand Oaks, CA: Sage.
D’Aveni, R. A., & MacMillan, I. C. (1990). Crisis and the content of managerial communications: A study of the focus of attention of top managers in surviving and failing firms. Administrative Science Quarterly, 35(4), 634–657. https://doi.org/10.2307/2393512.
Davidsson, P. (2004). Researching entrepreneurship. New York: Springer.
DiMaggio, P. J., & Powell, W. W. (1983). The iron cage revisited: Institutional isomorphism and collective rationality in organizational fields. American Sociological Review, 48(2), 147–160. https://doi.org/10.1016/S0742-3322(00)17011-1.
Dokko, G., & Gaba, V. (2012). Venturing into new territory: Career experiences of corporate venture capital managers and practice variation. Academy of Management Journal, 55(3), 563–583. https://doi.org/10.5465/amj.2009.0909.
Duriau, V. J., Reger, R. K., & Pfarrer, M. D. (2007). A content analysis of the content analysis literature in organization studies: Research themes, data sources, and methodological refinements. Organizational Research Methods, 10(1), 5–34. https://doi.org/10.1177/1094428106289252.
Dushnitsky, G. (2006). Corporate venture capital: Past evidence and future directions. In W. Classon, B. Yeung, A. Basu, & N. Wadeson (Eds.), The Oxford handbook of entrepreneurship (pp. 387–431). Oxford: Oxford University Press.
Dushnitsky, G., & Lenox, M. J. (2005). When do incumbents learn from entrepreneurial ventures? Corporate venture capital and investing firm innovation rates. Research Policy, 34(5), 615–639. https://doi.org/10.1016/j.respol.2005.01.017.
Dushnitsky, G., & Lenox, M. J. (2006). When does corporate venture capital investment create firm value? Journal of Business Venturing, 21(6), 753–772. https://doi.org/10.1016/j.jbusvent.2005.04.012.
Dushnitsky, G., & Shapira, Z. (2010). Entrepreneurial finance meets organizational reality: Comparing investment practices and performance of corporate and independent venture capitalists. Strategic Management Journal, 31(9), 990–1017. https://doi.org/10.1002/smj.851.
Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550. https://doi.org/10.2307/258557.
Eisenhardt, K. M., & Graebner, M. E. (2007). Theory building from cases: Opportunities and challenges. Academy of Management Journal, 50(1), 25–32. https://doi.org/10.5465/amj.2007.24160888.
Ernst & Young. (2002). Corporate venture capital report. Accessed January 20, 2016, from http://www.ey.com
Ernst, H., Witt, P., & Brachtendorf, G. (2005). Corporate venture capital as a strategy for external innovation: An exploratory empirical study. R&D Management, 35(3), 233–242. https://doi.org/10.1111/j.1467-9310.2005.00386.x.
Gaba, V., & Dokko, G. (2016). Learning to let go: Social influence, learning, and the abandonment of corporate venture capital practices. Strategic Management Journal, 37(8), 1558–1577. https://doi.org/10.1002/smj.2404.
Gaba, V., & Meyer, A. D. (2008). Crossing the organizational species barrier: How venture capital practices infiltrated the information technology sector. Academy of Management Journal, 51(5), 976–998. https://doi.org/10.5465/AMJ.2008.34789671.
Gabriel, R. A., Kuo, T.-T., McAuley, J., & Hsu, C.-N. (2018). Identifying and characterizing highly similar notes in big clinical note datasets. Journal of Biomedical Informatics, 82(1), 63–69. https://doi.org/10.1016/j.jbi.2018.04.009.
Gioia, D. A., Corley, K. G., & Hamilton, A. L. (2013). Seeking qualitative rigor in inductive research: Notes on the gioia methodology. Organizational Research Methods, 16(1), 15–31. https://doi.org/10.1177/1094428112452151.
Gomaa, W., & Fahmy, A. (2013). A survey of text similarity approaches. International Journal of Computer Applications, 68(13), 13–18.
Gompers, P. A., & Lerner, J. (2000). The determinants of corporate venture capital success: Organizational structure, incentives, and complementarities. In R. K. Morck (Ed.), Concentrated corporate ownership (pp. 17–54). Chicago: University of Chicago Press.
Gompers, P. A., & Lerner, J. (2004). The venture capital cycle (2nd ed.). Cambridge, MA: MIT.
Gottlieb, R. (2008). Directory of venture capital and private equity firms: Domestic and international. Millerton: Grey House Publishing.
Greenwood, R., & Hinings, C. R. (1996). Understanding radical organizational change: Bringing together the old and the new institutionalism. Academy of Management Review, 21(4), 1022–1054. https://doi.org/10.2307/259163.
Hackett, S., Parmanto, B., & Zeng, X. (2004). Accessibility of Internet websites through time. Paper presented at the proceedings of the 6th international ACM SIGACCESS conference on computers and accessibility, Atlanta, GA.
Hill, S. A., Maula, M. V. J., Birkinshaw, J., & Murray, G. C. (2009). Transferability of the venture capital model to the corporate context: Implications for the performance of corporate venture units. Strategic Entrepreneurship Journal, 3(1), 3–27. https://doi.org/10.1002/sej.54.
Hohenthal, J. (2006). Integrating qualitative and quantitative methods in research on international entrepreneurship. Journal of International Entrepreneurship, 4(4), 175–190. https://doi.org/10.1007/s10843-007-0010-6.
Huang, A. (2008). Similarity measures for text document clustering. Proceedings of the sixth New Zealand computer science research student conference, Christchurch, New Zealand
Ivanov, V. I., & Xie, F. (2010). Do corporate venture capitalists add value to start-up firms? Evidence from IPOs and acquisitions of VC-backed companies. Financial Management, 39(1), 129–152. https://doi.org/10.1111/j.1755-053X.2009.01068.x.
Jegadeesh, N., & Wu, D. (2013). Word power: A new approach for content analysis. Journal of Financial Economics, 110(3), 712–729. https://doi.org/10.2139/ssrn.1787273.
Johnson, R. B., Onwuegbuzie, A. J., & Turner, L. A. (2007). Toward a definition of mixed methods research. Journal of Mixed Methods Research, 1(2), 112–133. https://doi.org/10.1177/1558689806298224.
Keil, T. (2004). Building external corporate venturing capability. Journal of Management Studies, 41(5), 799–825. https://doi.org/10.1111/j.1467-6486.2004.00454.x.
Keil, T., Autio, E., & George, G. (2008). Corporate venture capital, disembodied experimentation and capability development. Journal of Management Studies, 45(8), 1475–1505.
Keil, T., Maula, M. V. J., & Wilson, C. (2010). Unique resources of corporate venture capitalists as a key to entry into rigid venture capital syndication networks. Entrepreneurship Theory and Practice, 34(1), 83–103. https://doi.org/10.1111/j.1540-6520.2009.00366.x.
Kollmann, T., & Kuckertz, A. (2010). Evaluation uncertainty of venture capitalists’ investment criteria. Journal of Business Research, 63(7), 741–747. https://doi.org/10.1016/j.jbusres.2009.06.004.
Kollmann, T., Kuckertz, A., & Middelberg, N. (2014). Trust and controllability in venture capital fundraising. Journal of Business Research, 67(11), 2411–2418. https://doi.org/10.1016/j.jbusres.2014.02.008.
Kuckertz, A., Kollmann, T., Middelberg, N., & Röhm, P. (2015, December). The interplay of track record and trustworthiness in venture capital fundraising. Journal of Business Venturing Insights, 4, 6–13.
Mandl, C., Berger, E. S. C., & Kuckertz, A. (2016). Do you plead guilty? Exploring entrepreneurs’ sensemaking-behavior link after business failure. Journal of Business Venturing Insights, 5, 9–13. https://doi.org/10.1016/j.jbvi.2015.12.002.
Maula, M. V. (2007). Corporate venture capital as a strategic tool for corporations. In H. Landström (Ed.), Handbook of research on venture capital (pp. 371–393). Cheltenham: Edward Elgar.
McKenny, A. F., Short, J. C., & Payne, T. (2013). Using computer-aided text analysis to elevate constructs – an illustration using psychological capital. Organizational Research Methods, 16(1), 152–184. https://doi.org/10.1177/1094428112459910.
Miller, D., & Le Breton-Miller, I. (2011). Governance, social identity, and entrepreneurial orientation in closely held public companies. Entrepreneurship Theory and Practice, 35(5), 1051–1076. https://doi.org/10.1111/j.1540-6520.2011.00447.x.
Morse, J. M. (2003). Principles of mixed methods and multimethod research design. In A. Tashakkori & C. Teddlie (Eds.), Handbook of mixed methods in social & behavioral research (pp. 189–208). Thousand Oaks: Sage.
Moss, T. W., Payne, T., & Moore, C. B. (2014). Strategic consistency of exploration and exploitation in family businesses. Family Business Review, 27(1), 51–71. https://doi.org/10.1177/0894486513504434.
Noyes, E., Brush, C., Hatten, K., & Smith-Doerr, L. (2014). Firm network position and corporate venture capital investment. Journal of Small Business Management, 52(4), 713–731. https://doi.org/10.1111/jsbm.12051.
Park, H. D., & Steensma, H. K. (2012). When does corporate venture capital add value for new ventures? Strategic Management Journal, 33(1), 1–22. https://doi.org/10.1002/smj.937.
Röhm, P. (2018). Exploring the landscape of corporate venture capital: A systematic review of the entrepreneurial and finance literature. Management Review Quarterly, 68(3), 1–44. https://doi.org/10.1007/s11301-018-0140-z.
Röhm, P., Köhn, A., Kuckertz, A., & Dehnen, H. S. (2018). A world of difference? The impact of corporate venture capitalists’ investment motivation on startup valuation. Journal of Business Economics, 88(3), 531–557. https://doi.org/10.1007/s11573-017-0857-5.
Röhm, P., Merz, M., & Kuckertz, A. (in press). Identifying corporate venture capital investors – a data-cleaning procedure. Finance Research Letters. https://doi.org/10.1016/j.frl.2019.01.004.
Schildt, H. A., Maula, M. V., & Keil, T. (2005). Explorative and exploitative learning from external corporate ventures. Entrepreneurship Theory and Practice, 29(4), 493–515. https://doi.org/10.1111/j.15406520.2005.00095.x.
Short, J. C., Brodberg, J. C., Cogliser, C. C., & Brigham, K. H. (2010). Construct validation using computer-aided text analysis (CATA) – an illustration using entrepreneurial orientation. Organizational Research Methods, 13(2), 320–347. https://doi.org/10.1177/1094428109335949.
Short, J. C., McKenny, A. F., & Reid, S. W. (2018). More than words? Computer-aided text analysis in organizational behavior and psychology research. Annual Review of Organizational Psychology and Organizational Behavior, 5(1), 415–435. https://doi.org/10.1146/annurev-orgpsych-032117-104622.
Siegel, R., Siegel, E., & MacMillan, I. C. (1988). Corporate venture capitalists: Autonomy, obstacles, and performance. Journal of Business Venturing, 3(3), 233–247. https://doi.org/10.1016/0883-9026(88)90017-1.
Silverman, D. (2006). Interpreting qualitative data (3rd ed.). London: Sage.
Soininen, J., Martikainen, M., Puumalainen, K., & Kyläheiko, K. (2012). Entrepreneurial orientation: Growth and profitability of Finnish small- and medium-sized enterprises. International Journal of Production Economics, 140(2), 614–621. https://doi.org/10.1016/j.ijpe.2011.05.029.
Souitaris, V., & Zerbinati, S. (2014). How do corporate venture capitalists do deals? An exploration of corporate investment practices. Strategic Entrepreneurship Journal, 8(4), 321–348. https://doi.org/10.1002/sej.1178.
Souitaris, V., Zerbinati, S., & Liu, G. (2012). Which iron cage? Endo- and exoisomorphism in corporate venture capital programs. Academy of Management Journal, 55(2), 477–505. https://doi.org/10.5465/amj.2009.0709.
Stanton, P., & Stanton, J. (2002). Corporate annual reports: Research perspectives used. Accounting Auditing & Accountability Journal, 15(4), 478–500. https://doi.org/10.1108/09513570210440568.
Strauss, A., & Corbin, J. (1998). Basics of qualitative research: Techniques and procedures for developing grounded theory (2nd ed.). Thousand Oaks, CA: Sage.
Sudek, R. (2006). Angel investment criteria. Journal of Small Business Strategy, 17(2), 89–103.
Tashakkori, A., & Teddlie, C. (2003). Handbook of mixed methods in social & behavioral research. Thousand Oaks, CA: Sage.
Teppo, T., & Wüstenhagen, R. (2009). Why corporate venture capital funds fail-evidence from the European energy industry. World Review of Entrepreneurship, Management and Sustainable Development, 5(4), 353–375.
Titus, V., House, J. M., & Covin, J. G. (2017). The influence of exploration on external corporate venturing activity. Journal of Management, 43(5), 1609–1630. https://doi.org/10.1177/0149206314562426.
VentureSource. (2018). VentureSource product features. Accessed March 15, 2018, from http://images.dowjones.com/wp-content/uploads/sites/43/2016/05/17155200/4.18_VentureSource_Product-sheet-2.pdf
Wadhwa, A., & Kotha, S. (2006). Knowledge creation through external venturing: Evidence from the telecommunications equipment manufacturing industry. Academy of Management Journal, 49(4), 819–835. https://doi.org/10.5465/amj.2006.22083132.
Wang, X. A., & Wan, W. P. (2013). Explaining the variance in underpricing among venture capital-backed IPOs: A comparison between private and corporate VC firms. Strategic Entrepreneurship Journal, 7(4), 331–342. https://doi.org/10.1002/sej.1163.
Weber, C., & Weber, B. (2005). Corporate venture capital organizations in Germany. Venture Capital, 7(1), 51–73. https://doi.org/10.1007/0-387-24850-1_6.
Weber, C., & Weber, B. (2011). Exploring the antecedents of social liabilities in CVC triads – a dynamic social network perspective. Journal of Business Venturing, 26(2), 255–272. https://doi.org/10.1016/j.jbusvent.2009.07.004.
Winters, T. E., & Murfin, D. L. (1988). Venture capital investing for corporate development objectives. Journal of Business Venturing, 3(3), 207–222. https://doi.org/10.1016/0883-9026(88)90015-8.
Yang, Y. (2012). Bilateral inter-organizational learning in corporate venture capital activity: Governance characteristics, knowledge transfer, and performance. Management Research Review, 35(5), 352–378. https://doi.org/10.1108/01409171211222278.
Zachary, M. A., McKenny, A. F., Short, J. C., Davis, K. M., & Wu, D. (2011). Franchise branding: An organizational identity perspective. Journal of the Academy of Marketing Science, 39(4), 629–645. https://doi.org/10.1007/s11747-011-0252-7.
Zahra, S. A., & Hayton, J. C. (2008). The effect of international venturing on firm performance: The moderating influence of absorptive capacity. Journal of Business Venturing, 23(2), 195–220. https://doi.org/10.1016/j.jbusvent.2007.01.001.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Röhm, P., Kuckertz, A. (2020). Playing with the Devil? Organizational Voids within Corporate Venture Capital Dyads. In: Moritz, A., Block, J.H., Golla, S., Werner, A. (eds) Contemporary Developments in Entrepreneurial Finance. FGF Studies in Small Business and Entrepreneurship. Springer, Cham. https://doi.org/10.1007/978-3-030-17612-9_9
Download citation
DOI: https://doi.org/10.1007/978-3-030-17612-9_9
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-17611-2
Online ISBN: 978-3-030-17612-9
eBook Packages: Business and ManagementBusiness and Management (R0)