Edit Article: Ivanov Xie (2010) - Do Corporate Venture Capitalists Add Value To Start Up Firms

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This page is referenced under: *[[VC Acquisitions Paper]] *[[VC Acquisitions Lit Review]] ==Reference== Ivanov, V.I. and Xie, F. (2010), "Do Corporate Venture Capitalists Add Value to Start-Up Firms? Evidence from IPOs and Acquisitions of VC-Backed Companies", Financial Management, Vol. 39, No. 1, pp.129-152 ([[Media:Ivanov Xie (2010) - Do Corporate Venture Capitalists Add Value To Start Up Firms.pdf|pdf]]) @article{ivanov2010corporate, title={Do Corporate Venture Capitalists Add Value to Start-Up Firms? Evidence from IPOs and Acquisitions of VC-Backed Companies}, author={Ivanov, V.I. and Xie, F.}, journal={Financial Management}, volume={39}, number={1}, pages={129--152}, year={2010}, publisher={Wiley Online Library}, abstract={We present evidence that corporate venture capitalists (CVCs) add value to start-up companies only when the start-ups have a strategic fit with the parent corporations of CVCs. We find that CVCs provide a variety of services and support that suit the specific needs of start-ups operating in different industries. CVC-backed start-ups are able to obtain higher valuations at the IPO than non-CVC-backed ones, and the value added by CVCs concentrates in start-ups with a strategic overlap with CVC parents. Entrepreneurial companies with strategic CVC backing also receive higher takeover premiums when they become acquisition targets.}, filename={Ivanov Xie (2010) - Do Corporate Venture Capitalists Add Value To Start Up Firms.pdf} } ==Abstract== We present evidence that corporate venture capitalists (CVCs) add value to start-up companies only when the start-ups have a strategic fit with the parent corporations of CVCs. We find that CVCs provide a variety of services and support that suit the specific needs of start-ups operating in different industries. CVC-backed start-ups are able to obtain higher valuations at the IPO than non-CVC-backed ones, and the value added by CVCs concentrates in start-ups with a strategic overlap with CVC parents. Entrepreneurial companies with strategic CVC backing also receive higher takeover premiums when they become acquisition targets.

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