Search results for "Follow-on investment"

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

2018

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 …