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The venture capital (VC) landscape is a crucial driver of economic growth and innovation, comprising a diverse range of capital investors. This dissertation highlights the heterogeneity, performance, and massive and rapid scaling efforts in this sector, focusing on the two dominant actors: Independent Venture Capital (IVC) and Corporate Venture Capital (CVC). The first study examines the contrasting lifespans of CVCs and IVCs, highlighting the early termination patterns of CVCs. The second study delves into the diverse nature of CVCs and analyzes their influence on the efficiency of portfolio firms. The third study probes the hypercompetitive environment in the VC landscape. It examines its implications and funds' strategies to provide quality signals to investors and startups in a hypercompetitive market. The fourth study looks deeper at the beneficiaries of VC funding: digital startups. Specifically, it delves into massive and rapid business scaling dynamics, shedding light on the key drivers behind this growth trajectory and its tensions. In sum, this dissertation advances the prevailing knowledge on venture capital and digital entrepreneurship, offering a deeper exploration of the heterogeneity of the VC landscape with a spotlight on CVCs. Additionally, it provides frontier research into hypercompetition and the underlying dynamics of massive and rapid business scaling.
This study explores the concept of massive and rapid business scaling (MRBS) in the context of digital start-ups by identifying 20 factors clustered into seven core drivers. Through inductive qualitative research, the study builds on 53 semi-structured interviews with founders, executives, and advisors, leading to the development of a framework that uncovers seven core drivers of MRBS contributing to the scaling process. These core drivers are as follows: 1) scanning the environment and recognizing opportunities, 2) iteratively adjusting the business model with an asset-light structure, 3) achieving operational excellence through digitization, 4) building an efficient and entrepreneurial workforce combined with leadership and vision, 5) leveraging internal resources to strengthen positioning and expand the market, 6) attracting capital to facilitate growth realization, and 7) cultivating organizational agility and a transformation culture. While core drivers one to five imply a processual nature, the sixth and seventh core drivers serve as a foundation for MRBS. Moreover, this study outlines several areas of tension within the process of MRBS. Therefore, the study provides valuable insights for scholars and practitioners.
Prior research has indicated that hypercompetition exists in the venture capital (VC) market. However, it remains poorly understood what implications arise from hypercompetition on VCs' strategies and operational activities and how VC funds can capitalise their competitive advantages and signal investor quality to start-ups and limited partners. To fill this knowledge gap, we use inductive qualitative research and grounded theory as a research strategy. Our results offer evidence that hypercompetition requires strategic and operational adaptability to new market dynamics and a strong need to develop competitive strategies and improve fund capabilities. We harness the different VC fund strategies from our sample to derive dynamic fund strategies to support quality signalling and exploitation of competitive advantages. The six fund strategies differ based on fund size, capabilities and degree of adaptability. Our study contributes to the literature by addressing the topic of fund strategy formulation and competitive advantages in high-competitive market dynamics.
While corporate venture capital funds (CVCs) are commonly analyzed as homogenous units, they display significant heterogeneity across various organizational aspects, which affect them and subsequently their portfolio firms. Using a sample of 383 European portfolio firms from the longitudinal VICO dataset, we first investigate the impact of investor type (independent vs corporate) on firm operating efficiency. We show that firms backed by CVCs suffer reductions in productivity. We then account for CVC heterogeneity and find that these significant reductions in operating efficiency only occur for ventures backed by endoisomorphistic CVCs, which resemble more corporate structures. By contrast, firms backed by exoisomorphistic CVCs, which resemble more independent venture capital structures, do not show significant differences in productivity compared to ventures that receive independent venture capital backing.
Corporate venture capitalists (CVCs) have shorter lifespans than independent venture capitalists (IVCs), but the reasons for this are not well understood. This paper identifies influencing factors affecting lifespans of CVCs and IVCs. Based on a sample of 190 articles, this systematic review identifies 41 factors that influence VC performance across four dimensions: decisions about strategies, the exploitation of venture capital resources and characteristics, active involvement in the venture capital environment, and limited underlying room for maneuvering. These dimensions show differences in the decision-making of IVCs and CVCs and impact lifespan. CVCs yield greater financial performance than IVCs. However, our results suggest that five CVC-specific factors are significant influencing factors which can explain lifespan differences: investment objectives, organizational autonomy and structure, interorganizational relationships, commitment of corporate parent, and parent company size. Overall, the longevity of CVCs is largely determined by a number of internal decisions made between the CVC and its parent company. Limiting the influence of corporate parents is suggested to enhance the success and lifespan of CVCs.