"A Reputation for What, Exactly? How CVC Firm Reputation(s) Attract Potential Investments"

Abstract

In a sample of 156 corporate venture capital (CVC) investors over the course of 1998 to 2001 we study the effect of three different kinds of reputation on the investor’s ability to attract potential investments. We find that a reputation for strategic experience and reputation for strategic involvement are positively associated with the incumbent’s attractiveness to new firms. Curiously, a reputation for strategic misconduct also attracts new ventures, especially in the case where a CVC program also has a reputation for strategic experience. However, the positive effect of reputation for strategic misconduct on the incumbent’s attractiveness reverses if the incumbent is known to get deeply involved with its portfolio companies.