Corporate venture capitalists and independent venture capitalists: what do they know, who do they know, and should entrepreneurs care?

Abstract

While a strong stream of research has examined the value-added by venture capitalists and some recent research has also explored the value added by corporate venture capitalists, the value-added provided by these two types of investors for their portfolio companies has not been compared systematically. This study proposes to make such an evaluation by comparing the social capital based and knowledge-based forms of value added provided by independent and corporate venture capitalists to their portfolio firms. Employing primary data collected from U.S. technology-based new firms that had recently received both corporate venture capital and independent venture capital funding, the present study demonstrates that the value-adding contributions of corporate venture capital and independent venture capital investors are different but complementary.