CORPORATE VENTURE CAPITAL AND THE PROBABILITY TO ACQUIRE THE BACKED START-UP: A REAL OPTION PERSPECTIVE

To sustain their competitive positions, an increasing number of corporates access new knowledge and technologies from emerging start-ups by engaging in Corporate Venture Capital (CVC) investments. CVC investments provide corporates the option to in-source start-ups’ knowledge and technologies through follow-on acquisitions. However acquiring a backed start-up is not always a guarantee of success. Then, corporates should consider which are the most appropriate conditions under which it is beneficial to acquire a CVC backed start-up. Utilizing the theoretical lens of Real Option, we examine the conditions under which a CVC investment may evolve into an acquisition of the backed start-up. We p…

CROWDSOURCING COMMUNITY NETWORK AND SOLVERS’ SUCCESS

Network position and innovation capability in the regional innovation network

This paper investigates the positioning of actors characterized by different natures in a regional innovation network and explores how these actors improve their innovation capabilities by assuming prominence or brokering positions. Innovation capability is widely seen to be the driving force in building regional competitive advantage, therefore investigating how the positioning of actors improves their innovation-related activities is relevant in terms of regional competitiveness. This paper builds on a survey conducted on the Sicilian regional area in Italy. A questionnaire was used to collect data concerning the relationships established between actors and the extent to which these relat…

CVC AND INNOVATION PERFORMANCE: THE EFFECT OF TECHNOLOGICAL DISTANCE WITH STARTUPS AND COINVESTORS

Firms are increasingly opening their boundaries by engaging in corporate venture capital (CVC) programs as potential gateway into knowledge and technologies of innovative startups. By investing in promising startups across diverse industries with different technological knowledge from the knowledge base of the investing corporate, CVC programs constitute a vehicle for corporates to both exploit and explore innovation opportunities. We first examine the relationship between more explorative CVC investments portfolio and the innovation performance of the corporate. Then, we argue that when syndicating the CVC investments with a co-investor, the portfolio of syndication partners may affect the…

‘To own or not to own?’ A study on the determinants and consequences of alternative intellectual property rights arrangements in crowdsourcing for innovation contests

Due to copyright restrictions, the access to the full text of this article is only available via subscription. Firms are increasingly engaging in crowdsourcing for innovation to access new knowledge beyond their boundaries; however, scholars are no closer to understanding what guides seeker firms in deciding the level at which to acquire rights from solvers and the effect that this decision has on the performance of crowdsourcing contests. Integrating property rights theory and the problem-solving perspective while leveraging exploratory interviews and observations, we build a theoretical framework to examine how specific attributes of the technical problem broadcast by firms affect the see…

The role of Intellectual Property Rights in the value capturing of crowdsourcing for innovation contests

In this study, we investigate the role of IPR arrangements in crowdsourcing for innovation challenges. Integrating Property Rights Theory and the open innovation literature, we propose that specific challenge attributes affect the seekers organizations’ choice between alternative IPR arrangements and how this choice, in turn, affects the self-selection of external solvers into solving the challenge. We collected multi-source, interview data with open innovation directors and we built a unique data set of 729 awarded challenges broadcasted on InnoCentive platform from 2010 to 2016. Our findings contribute to the emerging literature on open innovation and crowdsourcing literature by bringing …

The effect of reshoring announcement on company share price

The reshoring trend has gained momentum among manufacturing companies, which increasingly decide to relocate their production activities back to their home country. In this article, we explore the relationship between the motivations guiding the decision to reshore and the companies’ shareholder value. Particularly, taking an eclectic paradigm perspective, we aim to understand whether the motivations driving the companies’ decisions to reshore explain changes in the shareholder value. Empirically, we built an ad-hoc database based on 370 reshoring decisions involving the USA as a reshoring destination and announced in the 10-year time window ranging from 2009 to 2018. Our results highlight…

The role of IPR arrangements in the crowdsourcing for innovation contest: an empirical investigation of the Innocentive challenges

In this study, we identify three different Intellectual Property Right arrangements- strong IPR (acquiring an IP), weak IPR (licensing agreement) and flexible IPR. Integrating Property Rights Theory and the open innovation literature, we propose that specific challenge attributes affect the seekers organizations’ choice between alternative IPR arrangements and how this choice, in turn, affects the self-selection of external solvers into solving the problem. We collected multi-source, interview data with open innovation directors and a unique data set of 819 closed and awarded challenges broadcasted on InnoCentive platform from 2010 to 2016. Our findings contribute to the emerging literature…

CORPORATE VENTURE CAPITAL SYNDICATION STRATEGIES: A DYNAMIC NETWORK PERSPECTIVE

Corporate Venture Capital (CVC) syndication is embraced by over 80% of corporates which co-investing the same startups with other corporates create a CVC syndication network. In this paper, we aim at exploring the evolutionary dynamics of the CVC syndication network. Specifically, we address this topic adopting two different perspectives. First, we investigate the architectural evolution of the CVC syndication network examining five dimensions that characterize the evolution of the network structure (i.e. degree distribution, connectivity, clustering, density and degree assortativity). In addition, we study how three network strategies (i.e. prominence, entrepreneurial and relational) evolv…

The impact of fairness on the performance of crowdsourcing an empirical analysis of two intermediate crowdsourcing platforms

This research aims to investigate mechanisms available to the seeker to encourage participation of solvers to a challenge. We hypothesize that specific crowdsourcing mechanisms, reducing the information asymmetry of solvers on the challenge, increase solvers’ perception of procedural and distributive fairness and incentive their self-selection process. Moreover, posing problem in an ‘open’ manner exposes seekers to possible opportunism risks. Thus, seekers utilize many safeguard contractual mechanisms to mitigate these risks and protect the information shared in a challenge. By using data from two intermediate crowdsourcing pltaforms, we provide that safeguard mechanisms may have a drawback…

Why corporates syndicate their investments with a specific partner? An explorative analysis of corporate venture capital co-investments

The 80% of corporates that engage in CVC activities, make these investments with other corporates, recognizing the strategic benefits provided by co-investors. Despite the relevance of this phenomenon, no studies focus on the motivations that drive a corporate to syndicate its investments and most important there are no researches that investigate antecedents that drive a corporate in choosing the partner with whom to syndicate the CVC investments. Thus, the aim of this paper is to study why corporates syndicate their CVC investment with a specific partner. Based on the CVC and the alliance literatures we propose a research framework that considers two main elements characterizing a CVC syn…

How do I rule my solver’s relationship? An empirical investigation of governance structures in crowdsourcing contests

In order to continually innovate, companies are increasingly opening their boundaries and signing crowdsourcing agreements with solution providers. However, crowdsourcing scholars are no closer to understanding how possible solvers’ opportunistic behaviours affect the governance structure proposed by the seeker at the moment the challenge is broadcast. Building on the managerial-choice approach of transaction cost economics, we aim to examine how contract conditions, specified in the request for proposal (RFP), aiming to reduce the effect of solver’s opportunistic behaviours whilst influencing seekers’ preferences toward proposing contractual agreements to manage the working relationship wi…

How do different network positions affect crowd members' success in crowdsourcing challenges?

In the crowdsourcing challenges, crowd members can interact with each other by, for example, chatting, exchanging feedback, providing advice, discussing, and commenting on ideas. These social interactions shape a network structure, which is a set of social relationships developed by crowd members. This study aims at investigating how occupying diverse network positions within a crowdsourcing challenge network increases the members' likelihood to succeed in a competition. Leveraging prior literature on social networks and crowdsourcing research, we theorize how central and structural hole network positions influence the crowd members' likelihood of winning crowdsourcing challenges by leverag…

TEAM-BASED INNOVATION CONTESTS FOR CROWDSOURCING: AN EXPLORATORY STUDY ON IDEACONNECTION PLATFORM

Crowdsourcing for innovation contests represents a promising mechanism to access and integrate external ideas. Among various crowdsourcing types, online, team-based contest is one of the most prominent one. The objective of this study is to deepen the understanding of team-based crowdsourcing by exploring specifically the issues that characterise the innovation process of crowdsourcing in a virtual team setting. To empirically pursue this aim, we conducted an interview-based case study leveraging interviews of 106 solvers and 24 facilitators moderating the team of solvers, which have participated in contests through the IdeaConnection crowdsourcing platform. We found that five main issues …

THE EFFECT OF ASSUMING DIFFERENT POSITIONS IN THE CROWDSOURCING COMMUNITY NETWORK ON SOLVERS’ SUCCESS

Crowdsourcing for innovation: understanding the role of IPR, governance and fairness in crowdsourcing contests

THE MODERN LANDSCAPE OF EXTERNAL CORPORATE VENTURING: AN EXPLORATIVE STUDY ON THE CHOICE AMONG NEW AND TRADITIONAL CORPORATE VENTURING MODES

Corporate Venture Capital follow-on investments: the role of co-investors

CVC investments allow corporates the option to internalize startups’ knowledge and technologies through follow-on investments. Since acquiring a backed startup is not always a guarantee of success, corporates should consider which are the most appropriate conditions under which it is beneficial to acquire the startup. Under the theoretical lens of Real Option theory, we examine the conditions under which a CVC investment may evolve into different kind of CVC follow-on investments. We suggest that the CVC characteristics that mitigate both endogenous and exogenous uncertainties positively affect the corporate’s decision to acquire a backed startup. In addition, we argue that the presence of …

Intellectual property management between buyer-supplier in the crowdsourcing context

In this paper we investigate the antecedents of buyers’ decisions related to the management of the IPR generated by the suppliers in crowdsourcing contests. Leveraging on Property Rights Theory and interview data, we examine how contest’ attributes affect two buyers’ decisions about (1) whether to define an IPR arrangement ex-ante or negotiating it ex-post with the winning supplier; (2) the choice between strong or weak ownership levels of the IPR arrangement. To test the developed hypotheses, we build a dataset of 819 contests broadcasted on InnoCentive (from 2010 to 2016). Our findings contribute to both the operations management and the crowdsourcing literatures.

Governance Considerations for Seeker–Solver Relationships: A Knowledge-Based Perspective in Crowdsourcing for Innovation Contests

The need to solve innovation problems and insource knowledge has led to an increasing number of organizations engaging in crowdsourcing activities and subsequently establishing working relationships with winning solution providers. Using a knowledge‐based view and the problem‐solving perspective, we develop a theoretical framework suggesting how specific innovation problem attributes (i.e. the decomposability, formulation and search space of the problem) influence the governance decision (unilateral vs. bilateral) of seekers to manage the relationship with winning solvers. We empirically analyse the framework using 582 challenges broadcast on the NineSigma crowdsourcing platform. Our result…

WHY CORPORATES INVEST IN THE SAME START-UP AN EXPLORATIVE ANALYSIS OF CVC SYNDICATIONS

This study investigates why two or more corporates co-invest in the same start-up syndicating their CVC activities. Based on two strands of literature, the CVC and the alliance, we propose a research framework that explores the possible antecedents of CVC syndications. Particularly, grounded on alliance literature, we look at the CVC syndication by combining two dimensions, relational and technological: the relational dimension describes the competitive or cooperative nature of the relationship between partners of CVC syndications, while the technological one represents the exploitative or explorative technological objectives that corporates could pursue when coinvesting in a start-up. We a…

LEVERAGING CROWDSOURCING COMMUNITY TO INCREASE THE CHANCES OF WINNING CONTESTS: A SIGNALLING THEORY APPROACH

How can I signal my quality to emerge from the crowd? A study in the crowdsourcing context

Crowdsourcing contests are characterized by an intensive level of competition because of the extensive number of solvers that voluntarily self-select to participate in such contests. This study aims at understanding how solvers can signal their quality attributes through the community functionalities, i.e. the online profile and the discussion blog of the crowdsourcing platform, to improve their chances of winning crowdsourcing contests. Drawing on signaling theory, we hypothesize that signaling their skills and capabilities by crafting profiles rich in personal and professional information and by participating actively within the discussion blog by posting and commenting, solvers can influ…

POSITIONS IN CROWDSOURCING COMMUNITY NETWORK AND SOLVERS’ SUCCESS

Treating the crowd fairly: increasing the solvers’ self-selection in idea innovation contests

Abstract The success of idea crowdsourcing contests depends on the wideness of the number of solvers that voluntarily self-select to solve the problem broadcast by the seeker and previous research has started to highlight the role of fairness in the self-selection process of solvers. This study aims at deepening the understanding concerning how fairness can influence the solvers’ self-selection. By applying a netnographic research design, we identify possible unexplored facets of fairness in the crowdsourcing context, i.e., prize award, award guaranteed, and non-blind contest. Theoretically, we drew from the organizational justice and fairness literature to develop hypotheses about how the …

How does disruptive innovation influence the funding decisions of different venture capital investors? An empirical analysis on the role of startups' communication

Entrepreneurs present their ideas in a favorable light through compelling communications that may shape the investors' impressions about the value of the startup's technology and its potential to disrupt. Assessing such communications, venture capital (VC) investors get an impression of the startup's technology and shape their willingness to commit resources to it. Since diverse kinds of VC investors pursue alternative investment objectives, they may develop different impressions of the startup's technology and accordingly make different resource commitment decisions. This paper aims to investigate the resource commitment decisions of VC investors when financing startups communicating disru…