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abstract={A prominent motive for corporate venture capital (CVC) is the identification of entrepreneurial-firm acquisition opportunities. Consistent with this view, we find that one of every five startups purchased by 61 top corporate investors from 1987 through 2003 is a venture portfolio company of its acquirer. Surprisingly, our analysis reveals that takeovers of portfolio companies destroy significant value for shareholders of acquisitive CVC investors, even though these same investors are “good acquirers” of other entrepreneurial firms. We explore numerous explanations for these puzzling findings, which seem rooted in managerial overconfidence or agency problems at the program level.},

filename={Benson Ziedonis (2010) - Corporate Venture Capital And The Returns To Acquiring Portfolio Companies.pdf}

}

abstract={Given the level of involvement between a venture capitalist and a portfolio firm’s management, and a VC’s propensity to facilitate collaborations within its network, it is likely that a VC continues to affect a firm beyond a successful public offering. This could manifest itself in many ways, including the M&A decisions of management, with a VC facilitating and encouraging mergers and acquisitions within its network. This paper seeks to answer two questions. First, what role do venture capital firms play in the acquisition decisions of their previous IPOs? And second, what effect does this have on acquisition announcement returns? To do this, I focus on the acquisition activity of VC-backed IPOs, specifically their acquisitions of VC-backed private targets. I find that venture capitalists continue to affect firm M&A decisions well after the initial public offering, but that this is generally of benefit to acquiring firm shareholders. The information sharing that occurs between a VC and a firm’s management appears to result in value-enhancing acquisitions of VC-backed private targets. This paper documents a further mechanism through which venture capitalists can add value to corporations.},

filename={Jones (2008) - The Information Role Of Venture Capitalists.pdf}

}