Title: The role of Corporate Venture Capital funds in financing biotechnology and healthcare: differing approaches and performance consequences

Authors: James Henderson

Addresses: IMD International, Chemin de Bellerive, 23, 1001 Lausanne, Switzerland

Abstract: Corporate Venture Capital (CVC) is an alternative financing mechanism to traditional venture capital for promising start-ups. Yet, these programmes have been operated in very different ways with some focusing on ||reserving the right to play|| vs. others focusing on ||leveraging or upgrading the core||. The paper explores the role of these different CVC models and assesses the performance consequences for the start-ups. Existing research has found that CVC programmes that focused on ventures related to their base businesses were more likely to have more initial public offerings and higher valuations than independent venture capitalists. Furthermore, researchers have found that this effect may be owing to corporate endorsement or the relationships actually developed between the business unit and the entrepreneurial venture. This paper confirms these findings for the biotechnology context.

Keywords: CVC; corporate venture capital; entrepreneurial finance; biotechnology financing; healthcare financing; technoentrepreneurship; technopreneurship.

DOI: 10.1504/IJTE.2009.027544

International Journal of Technoentrepreneurship, 2009 Vol.2 No.1, pp.29 - 44

Published online: 31 Jul 2009 *

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